![Sample our Economics, Finance,Business & Industry journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5931/TOC-Subject-Sample-2021-Economics-Finance-Business-Industry.jpg"})
ABSTRACT
Metrology is the study of measurement science. Publicly funded outputs from measurement science have public good characteristics, and thus scholars have previously investigated the economic impact of such outputs on aggregate productivity as a first look at the impact of such public funds on economic activity. This study is the first to explore the relationships between one output from measurement science—calibration tests at the U.S. National Institute of Standards and Technology (NIST)—and aggregate productivity. The finding of a positive relationship is suggested to be a springboard for future research on the economics of metrology.
JEL:
Acknowlgements
I appreciate the many helpful comments and suggestions on earlier versions of this paper from my colleague Martijn van Hasselt and from my virtual colleagues John Scott (Dartmouth College) and Greg Tassey (University of Washington and former Chief Economist at NIST).
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 According to Himbert (Citation2009, 26), the first economic use of measurement might trace as far back in time as to the activities that are claimed to have occurred in Mesopotamia in 6000 BC: “Among the oldest testimonies of measurement processes in the mid-eastern civilisations, one has to mention the clay balls (6000 BC) found in Mesopotamia: to assess for instance the size of a flock of sheep, the owner was sealing into a large clay sphere as many small balls as there were individuals in the flock, e.g. lambs. The seal was broken, if necessary, to give reliable evidence of the earlier characteristics of the flock.”
2 This passage is quoted from Richardson (Citation1976, 1).
4 See also Swann (Citation2010).
5 I thank an anonymous reviewer for point out that the study of metrology “can be considered the less famous, and younger, sibling of the economics of standardization.” There is a rich literature on the economics of standardization that traces to Hemenway (Citation1975) and to the writings of David and others; see the references in David and Greenstein (Citation1990).
6 See also the U.K report by Lambert (Citation2010) and the chapter therein by Temple, the references in Blind, Jungmittag, and Mangelsdorf (Citation2011), and the excellent summary study by King, Lambert, and Temple (Citation2017).
7 The summary by Robertson and Swanepoel (Citation2015) focused on the following specific countries: Australia, France, Germany, and New Zealand. The National Institute of Standards and Technology (NIST) documents the global number of metrology laboratories; see, https://www.nist.gov/iaao/national-metrology-laboratories.
8 A more detailed history of NIST is in Link (Citation2019) and in the NIST authored references therein.
9 See, De Simone and Treat (Citation1971) for an history of the metric system in the United States.
11 Swann’s (Citation2009) reference to market failure refers to the public good characteristics of measurement standards and the associated underinvestment in measurement standards research by the private sector.
13 While the empirical analysis presented in this paper represents, to the best of my knowledge, the first study to explore the relationships between one output from measurement science and aggregate productivity, NIST has a long history of sponsoring case studies to examine the economic productivity-enhancing outputs and outcomes associated with its measurement science investments. Many of these studies are documented at https://www.nist.gov/director/outputs-and-outcomes-nist-laboratory-research, but a more detailed summary of these studies is in Link and Scott (Citation2012).
14 This is the market failure referred to in footnote 11.
15 The public sector does not develop standards in isolation from the private sector’s needs. Many standards are consensus standards developed for and with industry.
16 See Tassey (Citation2017) for a comprehensive overview of the economics of standards.
17 The firm will choose the best Q given its choice for S.
18 The prime symbol (′) denotes a first derivative; here the derivative is with respect to S.
19 The double-prime symbol (′′) denotes a second derivative.
20 By optimal level of use, I mean the scope of activities that benefit from the measurement standard. A measurement standard is fixed in the sense that it is either used or not used.
21 … as economic theory would predict.
22 See Robertson and Swanepoel (Citation2015).
23 The Department of Commerce, which publishes this index, uses the adjective multifactor. Economists frequently refer to this index using the adjective total factor.
24 These results are available from the author on request.
25 In constant dollars, the NIST agency budget is less variable over time than the NIST laboratory R&D budget. Thus, changes in NIST Lab R&D Intensity mirrors changes in NIST Lab R&D; the correlation coefficient between the two regressors is 0.881 (p<.001). As a result, the predicted values of log (Calibration Tests) generated by the models in columns (1) and (3) are similar. This, in turn, explains the similarity of the second-stage results in columns (2) and (4).
26 See footnote 13 and see, as a recent example, Leech and Scott (Citation2011).
27 I thank an anonymous reviewer for his/her encouragement to emphasize this point.