Bureau of Transportation Statistics (BTS)
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APPENDIX A
Basic Growth-Accounting Methodology

The empirical relationship used to estimate growth of multifactor productivity by the basic growth-accounting methodology is shown below:

uppercase delta uppercase t over uppercase t = uppercase delta uppercase q over uppercase q minus [(lowercase alpha * uppercase delta Labor over Labor) + (lowercase beta * uppercase delta Capital over Capital) = (lowercase gamma * uppercase delta Intermediate Inputs over Intermediate Inputs)]

Where:

uppercase delta uppercase t over uppercase t = Growth of MFP
uppercase delta uppercase q over uppercase q = Growth of gross output
uppercase delta Labor over Labor = Growth of labor
uppercase delta Capital over Capital = Growth of capital
uppercase delta Intermediate Inputs over Intermediate Inputs = Growth of intermediate inputs

α = Share of labor cost in output

β = Share of capital cost in output

γ = Share of intermediate inputs cost in output.