Capital services
In economics, capital services refer to a chain-type index of service flows derived from the stock of physical assets and software. These assets are coordination, equipment, software, structures, land, and inventories. Capital services are estimated as a capital-income weighted average of the growth rates of each asset. Capital services differ from capital stocks because short-lived assets such as equipment and software provide more services per unit of stock than long-lived assets such as land. Unlike capital goods, capital services are owned by the person or group of people providing them.
Role in productivity measurement
Capital services are widely used in growth accounting frameworks to measure thecontribution of capital inputs to productivity. The OECD notes that capital services
provide a more accurate measure of productive input than capital stock, because they
reflect the flow of services generated by different types of assets rather than their
replacement value. Short-lived assets such as machinery or software typically have
higher service flows per unit of stock than long-lived assets such as structures and
land.