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On aggregation of multi-factor productivity indexes

Author

Listed:
  • Rolf Färe

    (Oregon State University
    University of Maryland)

  • Valentin Zelenyuk

    (School of Economics and Centre for Efficiency and Productivity Analysis (CEPA) at The University of Queensland)

Abstract

The goal of this paper is to investigate the question of the importance of aggregation of the Paasche and Laspeyres versions of the Malmquist quantity and productivity indexes from both theoretical and empirical perspectives. We discuss the existing justification and provide an alternative theoretical justification based on results from the functional equations literature. We also use real data (from Kumar and Russell (2002, American Economic Review)) to illustrate how dramatic the differences in conclusions can be in practice, depending on whether one employs Laspeyres or Paasche productivity indexes.

Suggested Citation

  • Rolf Färe & Valentin Zelenyuk, 2021. "On aggregation of multi-factor productivity indexes," Journal of Productivity Analysis, Springer, vol. 55(2), pages 107-133, April.
    • Handle: RePEc:kap:jproda:v:55:y:2021:i:2:d:10.1007_s11123-021-00598-w
    DOI: 10.1007/s11123-021-00598-w
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    References listed on IDEAS

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    Cited by:

    1. Valentin Zelenyuk, 2023. "Productivity analysis: roots, foundations, trends and perspectives," Journal of Productivity Analysis, Springer, vol. 60(3), pages 229-247, December.
    2. Tomas Balezentis & Vaida Sapolaite, 2022. "Productivity surplus and its distribution in Lithuanian agriculture," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(3), pages 721-740, August.
    3. Valentin Zelenyuk, 2021. "Performance Analysis: Economic Foundations & Trends," CEPA Working Papers Series WP162021, School of Economics, University of Queensland, Australia.
    4. Christopher O’Donnell, 2022. "How to Build Sustainable Productivity Indexes," CEPA Working Papers Series WP102022, School of Economics, University of Queensland, Australia.
    5. Aparicio, Juan & Santín, Daniel, 2022. "A New Malmquist Index Based on a Standard Technology for Measuring Total Factor Productivity Changes," MPRA Paper 114467, University Library of Munich, Germany.

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