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How is productivity measured? > Combined inputs

How are combined inputs measured?

Multifactor productivity (MFP) is calculated as a ratio of output to a combination of inputs. Inputs can include labor, capital, materials, energy, and purchased services.

For major sector measures, MFP is the ratio of output to labor and capital (buildings, machines, inventories, land).

For industry measures, MFP is the ratio of output to labor, capital, energy, materials, and purchased services.

Multifactor productivity is calculated by dividing real output by a combination of inputs.
All the measures are represented by indexes.

Combined inputs index

BLS combines each type of input into a single combined inputs index, with greater weight given to those that make up a larger proportion of total costs.

For example, an index of combined inputs for the car industry might include: