MEASURING INPUT PRODUCTIVITY GAINS FROM INFORMATION TECHNOLOGY

Abstract

This paper proposes a new method to measure the input productivity gains from information technology in complex managerial environments. The method employs a production function which maps output and relating moderating variables in the managerial environment into input resource consumption, with a random inefficiency component which can be affected by IT deployment. Sample hypotheses and a sketch of the F-tests used to identify reductions in input inefficiency are presented, and then illustrated for a new information technology which has recently been deployed in fast food restaurants.