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Measuring the Total Factor Productivity of Government Trading Enterprises

Performance Monitoring Report

This report was released in July 1992 and was produced by the Steering Committee on National Performance Monitoring. The paper aims to promote a better understanding of the steps involved in calculating and interpreting the total factor productivity measure. It provides an illustration of how to calculate this indicator for a typical GTE and presents several case study applications. The following six GTEs have been used as case studies:

  • Australian National Railways Commission
  • State Rail Authority of NSW
  • Melbourne Water
  • Port of Brisbane Authority
  • Pacific Power
  • Australia Post.

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Cover, Copyright, Preface, Contents

PART A: Total Factor Productivity

1 Total Factor Productivity - A Useful Indicator of Overall Economic Performance
1.1 Performance indicators
1.2 What is productivity?
1.3 The need for a 'total' productivity measure
1.4 TFP and economic efficiency
1.5 TFP and microeconomic reform
1.6 How can TFP be used by GTE managers?
1.7 How accurate are TFP results?
1.8 Conclusions

2 A Technical Guide to Calculating Total Factor Productivity
2.1 Methodology
2.1.1 Calculating TFP
2.1.2 Outputs and inputs
2.1.3 Capital stock
2.1.4 Depreciation
2.1.5 User cost of capital
2.1.6 The complete data set for Choochoo railways
2.2 Some illustrative results
2.3 Summary

PART B: Total Factor Productivity Case Studies

3 Background
3.1 Previous TFP studies
3.2 The case studies

4 Total Factor Productivity of Australian National: 1979-80 to 1990-91
4.1 Summary
4.2 Background
4.3 Measuring AN's aggregate output
4.3.1 AN's output index: construction
4.3.2 Results obtained from the model
4.4 Measuring AN's aggregate inputs
4.4.1 Labour
4.4.2 Fuel
4.4.3 Other (non-capital) inputs
4.4.4 Capital
4.4.5 AN's aggregate input index
4.5 AN's index of total factor productivity

Appendix 4.1: Data Set

5 Total Factor Productivity of the State Rail Authority (SRA) of New South Wales
5.1 Introduction
5.2 SRA's productivity
5.2.1 Data sources for SRA
5.2.2 Results for SRA
5.3 Freight Rail's productivity
5.3.1 Preliminary data sources for Freight Rail
5.3.2 Preliminary results for Freight Rail
5.4 Conclusions

Appendix 5.1: SRA Data

Appendix 5.2: Freight Rail Data

6 Total Factor Productivity of Melbourne Water
6.1 Introduction
6.2 Selecting inputs and outputs
6.3 Measuring outputs
6.4 Measuring inputs
6.5 Results

Appendix 6.1: Data

7 The Economic Performance of the Port Of Brisbane Authority: 1981-82 TO 1990-91
7.1 Introduction
7.2 Constructing output and input indexes
7.3 Measuring Port of Brisbane Authority aggregate output
7.4 Measuring non-capital inputs used by the Port of Brisbane Authority
7.5 Capital
7.6 Total factor productivity
7.7 Economic rate of return
7.8 Conclusion

Appendix 7.1: Data

8 Productivity of Pacific Power: Preliminary Results: 1978-79 TO 1990-91
8.1 Introduction
8.2 Method of analysis
8.3 Data sources
8.4 Preliminary results
8.5 Conclusions

9 Performance Measures for Australia Post: 1975-76 TO 1990-91
9.1 Summary
9.2 Introduction
9.3 Australia Post's TFP
9.4 Adjusting Australia Post's TFP for growth in the size of the network serviced
9.5 Australia Post's real rate of return

Appendix 9.1: Calculating Capital Inputs


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