The table below shows the use of labor and capital in the caviar industry of Beluga for two particular years. Also shown is the output of caviar and water pollution. Caviar output is shown in millions of eggs, pollution in tons of biological oxygen demand (BOD), labor in person-years, and capital in Rubles. The price of labor is constant at R 10,000 per person year, and capital services at R 0.20 per Ruble of capital stock.

Calculate productivity growth for these 2 years (using value shares for 1997). In particular, calculate labor productivity growth and total factor productivity growth (excluding pollution). Assuming pollution damage is R10,000 per unit, calculate total factor productivity growth, including pollution (considering pollution as an input).

Transcribed Image Text:

Year Caviar output Pollution Labor Capital stock 1997 1998 100,000 103,000 10 220 51 5550 1,000,000 1,000,000