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Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production process, i.e. output per unit of input, typically over a specific period of time.[1] The most common example is the (aggregate) labour productivity measure, one example of which is GDP per worker. There are many different definitions of productivity (including those that are not defined as ratios of output to input) and the choice among them depends on the purpose of the productivity measurement and data availability. The key source of difference between various productivity measures is also usually related (directly or indirectly) to how the outputs and the inputs are aggregated to obtain such a ratio-type measure of productivity.[2]
Productivity is a crucial factor in the production performance of firms and nations. Increasing national productivity can raise living standards because increase in income per capita improves people's ability to purchase goods and services, enjoy leisure, improve housing, and education and contribute to social and environmental programs. Productivity growth can also help businesses to be more profitable.[3]
- ^ Kaliski, Burton S., ed. (2001). Encyclopedia of busine$$ and finance. New York: Macmillan Reference USA. ISBN 0028650654. OCLC 45403115.
- ^ Sickles, Robin; Zelenyuk, Valentin (2019). Measurement of Productivity and Efficiency: Theory and Practice. Cambridge: Cambridge University Press. doi:10.1017/9781139565981. ISBN 9781139565981. S2CID 155765388.
- ^ Courbois & Temple 1975, Gollop 1979, Kurosawa 1975, Pineda 1990, Saari 2006, Hitt and Brynjolfsson 1996,[incomplete short citation] Sickles & Zelenyuk 2019