A company is selling some product. It makes some minimal modification, then engage in advertising company to increase the demand for the new, improved model. This tactic succeeds. Now each worker produces more market value per hour of work.
To the extent that the company can pass this off as a quality improvement, measured productivity increases. Otherwise, this change will show up as an increase in prices. Which is likely to happen? Will the unproductive labor of advertising increase the productivity of productive labor? -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
