Previous production function studies that examined the use of information inputs in US manufacturing seem to indicate their large underuse and implicitly suggest a policy of increased investment in such inputs. Here, the degree of underuse of information inputs is reexamined by using techniques similar to those used in earlier studies and by using more comprehensive and appropriate alternative methods, such as estimating translog functions via the systems approach. All inputs are expressed in monetary terms, so comparable marginal (value) products for all factors of production are obtained. The results are highly sensitive to the changes in methodology. The degree of underuse of information inputs in previous studies seems to have been overstated. These results are likely to be more reliable than those of previous studies due to the reductions in simultaneity and specification bias.
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