--- canonical_url: "https://csls.ca/ipm-archive/ipm-issue-24/estimating-capital-input-for-measuring-business-sector-multifactor-productivity-growth-in-canada-response-to-diewert-and-yu/" title: "Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu" author: name: "CSLS" url: "https://csls.ca/author/cslc/" date_published: "2026-07-13T07:33:50+00:00" date_modified: "2026-07-13T07:33:50+00:00" post_type: "ipm" summary: "" ipm_issue_period: - "Fall 2012" ipm_keyword: - "bottom-up" - "Canada" - "capital input" - "capital services" - "depreciation" - "international standards" - "MFP" - "Statistics Canada" - "top-down" - "user costs" ipm_research_theme: - "Measurement and methodology" ipm_country_focus: - "Canada" featured_image: "https://csls.ca/wp-content/uploads/2026/06/IPM_50_banner.webp" status: "publish" --- # Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu Canonical URL: https://csls.ca/ipm-archive/ipm-issue-24/estimating-capital-input-for-measuring-business-sector-multifactor-productivity-growth-in-canada-response-to-diewert-and-yu/ # Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu [Download full PDF article](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-24-3-Gu.pdf) Cite this article × Cite this article as: Gu, Wulong. 2012. “Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada: Response to Diewert and Yu.” International Productivity Monitor, No. 24 (Fall 2012): 49–62. https://www.csls.ca/ipm-archive/ipm-issue-24/estimating-capital-input-for-measuring-business-sector-multifactor-productivity-growth-in-canada-response-to-diewert-and-yu/ ## Author: - Wulong Gu Micro-Economic Analysis Division, Statistics Canada ## IPM Issue 24 Fall 2012 pp. 49–62 ## Related IPM articles [The Relationship between Efficiencies Defenses for Mergers and TFP Growth Robin Shaban Fall 2025 | IPM Issue 49 | pp. 82–102](https://csls.ca/ipm-archive/ipm-issue-49/the-relationship-between-efficiencies-defenses-for-mergers-and-tfp-growth/) [Appendix: Variable Definitions and Country/Sector Coverage for Regulatory Reform Analysis Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 1–18](https://csls.ca/ipm-archive/ipm-issue-49/appendix-variable-definitions-and-country-sector-coverage-for-regulatory-reform-analysis/) [The Potential Impact of Pro-competitive Regulatory Reforms on Productivity and Growth in Canada Gilbert Cette, Jimmy Lopez, Giuseppe Nicoletti, Océane Vernerey Fall 2025 | IPM Issue 49 | pp. 3–40](https://csls.ca/ipm-archive/ipm-issue-49/the-potential-impact-of-pro-competitive-regulatory-reforms-on-productivity-and-growth-in-canada/) [IPM Issue 49 Editors’ Overview Andrew Sharpe, Bart van Ark, Paul Schreyer Fall 2025 | IPM Issue 49 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-49/) [Using Ecosystem Accounting to Integrate the Environment in Measures of Multifactor Productivity Carl Obst Fall 2024 | IPM Issue 47 | pp. 87–108](https://csls.ca/ipm-archive/ipm-issue-47/using-ecosystem-accounting-to-integrate-the-environment-in-measures-of-multifactor-productivity/) [Eroding Natural Capital: An Alternative Explanation for the Secular Decline in Productivity Growth Christina Caron Fall 2024 | IPM Issue 47 | pp. 109–147](https://csls.ca/ipm-archive/ipm-issue-47/eroding-natural-capital-an-alternative-explanation-for-the-secular-decline-in-productivity-growth/) [Climate Change and Productivity — An Exploration Dirk Pilat Fall 2024 | IPM Issue 47 | pp. 54–86](https://csls.ca/ipm-archive/ipm-issue-47/climate-change-and-productivity-an-exploration/) [How Does Industrial Policy Impact Output, Hours and Productivity? The Canadian Experience Tim Sargent Fall 2024 | IPM Issue 47 | pp. 39–53](https://csls.ca/ipm-archive/ipm-issue-47/how-does-industrial-policy-impact-output-hours-and-productivity-the-canadian-experience/) [Accounting for the Decline of Canada’s Real GDP Per Capita since Mid-2022 Philip Smith Spring 2024 | IPM Issue 46 | pp. 83–100](https://csls.ca/ipm-archive/ipm-issue-46/accounting-for-the-decline-of-canadas-real-gdp-per-capita-since-mid-2022/) [IPM Issue 47 Editors’ Overview Andrew Sharpe, Bart van Ark Fall 2024 | IPM Issue 47 | pp. 1–2](https://csls.ca/ipm-archive/ipm-issue-47/) ## Abstract ## Résumé EN FR Copy link Email LinkedIn Diewert and Yu estimate that multifactor productivity grew at a 1.0 per cent average annual rate in the Canadian business sector from 1961 to 2011, compared to Statistics Canada’s Canadian Productivity Program estimate of 0.3 per cent. The major reason for this difference is that Diewert and Yu find capital services grew at 3.0 per cent per year, compared to Statistics Canada’s estimate of 4.8 per cent. This article identifies and discusses the three reasons for this discrepancy. First, while the Canadian Productivity Program aggregates capital services across industries to derive the capital input measure at the level of the business sector, Diewert and Yu use a top-down approach and directly compute capital and labour input series at the business sector level. Second, there are differences in the way the price of capital services is computed. Third, the Canadian Productivity Program bases its capital measures on a more detailed list of assets than Diewert and Yu. Statistics Canada estimates follow international guidelines and practices adopted by other statistical agencies in order to make estimates internationally comparable. RÉSUMÉ Diewert et Yu trouvent que la productivité multifactorielle a augmenté de 1.0% par an dans le secteur des entreprise canadien entre 1961 et 2011 par rapport à 0.3% dans le programme canadien de la productivité de Statistiques Canada. La raison majeure pour cette différence est que Diewert et Yu trouvent que les services du capital ont augmenté à un taux annuel de 3.0% par rapport à 4.8% de la Statistique Canada. Cet article identifie et discute les trois raisons pour cet écart. Premièrement, tandis que le programme de la productivité aggrége les services de capital à travers les industries pour obtenir une mesure d’intrants de capital à l’échelle du secteur des affaires, Diewert et Yu se serent d’une approache descendante dans laquelle seuls les éléments d’actif sont agrégés a l’échelle du secteur des entreprises. Deuxièmement, il y a des différences dans la manière de calculer les prix des services du capital. Troisièmement, le programme de la productivité se sert d’un ensemble plus détaille d’éléments d’actif que Diewert et Yu pour estimer les intrants de capital. Le programme de la productivité de Statistique Canada suit les lignes directrices et les pratiques internationales adoptées par d’autres bureaux de la statistique afin que les estimations soient comparables à l’échelle internationale. 1 Diewert et Yu estiment que la productivité multifactorielle a augmenté à un taux annuel moyen de 1,0 % dans le secteur des entreprises canadien de 1961 à 2011, comparativement à l’estimation du Programme canadien de la productivité de Statistique Canada de 0,3 %. La principale raison de cet écart est que Diewert et Yu constatent une croissance des services du capital de 3,0 % par année, comparativement à l’estimation de 4,8 % de Statistique Canada. Cet article cerne et examine les trois raisons de cet écart. Premièrement, alors que le Programme canadien de la productivité agrège les services du capital entre les industries pour dériver la mesure des intrants en capital au niveau du secteur des entreprises, Diewert et Yu utilisent une approche descendante et calculent directement les séries d’intrants de capital et de main-d’œuvre au niveau du secteur des entreprises. Deuxièmement, il existe des différences dans la façon dont le prix des services du capital est calculé. Troisièmement, le Programme canadien de la productivité repose sur des hypothèses différentes concernant les taux de rendement. [Download full PDF](https://csls.ca/wp-content/uploads/2026/07/IPM-Issue-24-3-Gu.pdf)