MATERIAL PRODUCTIVITY IN FOOD MANUFACTURING

Material prices have risen in food manufacturing, resulting in materia l productivity growth. This study estimates material productivity inde xes for New Jersey's food-manufacturing sector. A 21% material product ivity growth is indicated for the 1964-84 period. The mechanism of mat erial productivity growth is also investigated. Results suggest that g reater material efficiency is encouraged by rising material prices, wa ge rates, and regulation, and by declining food prices. Short-run impa cts on material productivity are caused by input substitution; beyond- the-short-run impacts are caused by material-saving technological chan ge. In some food-manufacturing subsectors, higher material prices may bring lower revenues to material suppliers.