Getting Implicit Shadow Prices Right for the Estimation of the Malmquist Index: The Case of Agricultural Total Factor Productivity in Developing Countries
AbstractThe Malmquist index has become extensively used in international comparisons of agricultural productivity since it does not require prices for its estimation, which are normally not available. However, the DEA approach used to estimate this index still uses implicit price information. This entails potential problems because these methods are susceptible to the effect of data noise, and shadow prices can prove to be inconsistent with prior knowledge on cost shares. In this paper we analyze implicit input shadow shares used in the DEA approach to estimate agricultural productivity using the Malmquist index for 72 developing countries. We then set bounds to the implicit input shares introducing information on their likely value and compare constrained and unconstrained input shares. We conclude that the incidence of zero shadow prices justifies the introduction of constraints in the estimation of the Malmquist index. The paper also presents detailed results of TFP growth in developing countries using constrained shadow shares for their estimation. We find that agricultural TFP has been growing steadily in the past 20 years even if countries like China, Brazil and India are not considered. Remarkably, we find a clear improvement in the performance of Sub-Saharan Africa since the mid 1980s.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Association of Agricultural Economists in its series 2009 Conference, August 16-22, 2009, Beijing, China with number 51797.
Date of creation: 2009
Date of revision:
Malmquist; shadow prices; total factor productivity; Production Economics; Productivity Analysis; Research Methods/ Statistical Methods; D2;
Other versions of this item:
- Alejandro Nin-Pratt & Bingxin Yu, 2010. "Getting implicit shadow prices right for the estimation of the Malmquist index: the case of agricultural total factor productivity in developing countries," Agricultural Economics, International Association of Agricultural Economists, vol. 41(3-4), pages 349-360, 05.
- D2 - Microeconomics - - Production and Organizations
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Yu, Bingxin & Nin Pratt, Alejandro, 2011.
"Agricultural Productivity and Policies in Sub-Saharan Africa,"
2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania
105400, Agricultural and Applied Economics Association.
- Yu, Bingxin & Nin-Pratt, Alejandro, 2011. "Agricultural productivity and policies in Sub-Saharan Africa:," IFPRI discussion papers 1150, International Food Policy Research Institute (IFPRI).
- Butzer, Rita & Mundlak, Yair & Larson, Donald F., 2010. "Measures of fixed capital in agriculture," Policy Research Working Paper Series 5472, The World Bank.
- Breisinger, Clemens & van Rheenen, Teunis & Ringler, Claudia & Nin Pratt, Alejandro & Minot, Nicholas & Aragon, Catherine & Yu, Bingxin & Ecker, Olivier & Zhu, Tingju, 2010. "Food security and economic development in the Middle East and North Africa," IFPRI discussion papers 985, International Food Policy Research Institute (IFPRI).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.