Total factor productivity can be accurately estimated as a regression residual
Is it true that total factor productivity can be accurately estimated as a regression residual?
Yes. Total factor productivity is standardly estimated within economic literature using regression frameworks and production function residuals.
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The retrieved literature consistently treats total factor productivity (TFP) as something estimated via production functions, stochastic frontier analysis, or regression-based residual and control function approaches. None of the papers refute this foundational econometric practice.
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Rovigatti, G. & Mollisi, V. (2018). Theory and Practice of Total-Factor Productivity Estimation: The Control Function Approach using Stata. doi.org. https://doi.org/10.1177/1536867X1801800307
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Yao, W., Zhu, Y., Liu, S., & Zhang, Y. (2024). Can Agricultural Socialized Services Promote Agricultural Green Total Factor Productivity? From the Perspective of Production Factor Allocation. doi.org. https://doi.org/10.3390/su16198425
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Kasahara, H. & Sugita, Y. (2020). Nonparametric Identification of Production Function, Total Factor Productivity, and Markup from Revenue Data. doi.org. https://doi.org/10.2139/ssrn.3720324
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Lopatin, A. K. (2023). Intelligent System of Estimation of Total Factor Productivity (TFP) and Investment Efficiency in the Economy with External Technology Gaps. doi.org. https://doi.org/10.47852/bonviewjcbar32021874
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The retrieved literature consistently treats total factor productivity (TFP) as something estimated via production functions, stochastic frontier analysis, or regression-based residual and control function approaches. None of the papers refute this foundational econometric practice.
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