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MEASURING THE ALLOCATION OF ESKOM'S PRODUCTIVITY DIVIDEND 1
Author(s) -
Lawrence Denis A.,
Van Der Westhuizen Gert
Publication year - 2008
Publication title -
south african journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.502
H-Index - 31
eISSN - 1813-6982
pISSN - 0038-2280
DOI - 10.1111/j.1813-6982.2008.00195.x
Subject(s) - productivity , profitability index , dividend , economics , distribution (mathematics) , stakeholder , econometrics , operations management , business , industrial organization , operations research , agricultural economics , macroeconomics , finance , mathematics , management , mathematical analysis
The methodology developed by Lawrence, Diewert and Fox and Lawrence and Richards is used to determine the contribution of productivity and price changes to changes in Eskom's profitability over time. This methodology enables the calculation of the distribution of the benefits of Eskom's productivity improvements – its “productivity dividend”– among the three key stakeholder groups: consumers, input suppliers (including employees) and Eskom's owners. The results of this study show that Eskom passed on substantially more than the benefits from productivity improvements over the 10 years to 2002 to consumers in the form of real price reductions and to labour in the form of higher real wages.