Partial Factor Productivity (PFP)
PFP measures how efficiently an entity is using a single factor of production to produce its goods and/or services. Factors of production include but are not limited to labour, capital, energy and raw material. The most commonly used PFP measures are labour productivity and capital productivity. Other partial measures of productivity include energy productivity and raw material productivity.
Labour productivity measures the amount of goods and/or services produced by each worker. It can be measured both in terms of physical input (output per worker) or the intensity of the worker’s efforts (output per hour worked). Output per worker is more popularly used for international comparisons because employment data is easier to obtain and more reliable than hours worked data. While labour productivity is only a partial measure of productivity, it provides a good estimate of overall productivity given that it is driven by all factors of production, such as capital, technology, labour practices, etc.
Capital Productivity measures the level of efficiency with which capital stock is used to produce output. Specifically, it is the amount of output produced per unit value of net capital stock
Multifactor Productivity relates output to all inputs. Specifically, it is the amount of goods and/or services produced per unit of all combined factors of production.
Total Factor Productivity (TFP)
TFP accounts for contributions to output not caused by labour and capital. The usual interpretation of TFP is that it reflects the way in which technological innovation allows labour and capital to be used efficiently and effectively to increase output. Increasing TFP implies that a business or an economy is producing more output while using the same amount of labour and physical capital.
The factors driving TFP include, among others, labour-management corporation; government policies; education and skills training; efficient public sector; efficient infrastructure; efficient markets (labour, goods and financial markets); economies of scale; research and development; diffusion of technologies; and innovation.