A proposal for decomposing and adjusting the conventional Divisia index for the measure of productivity
AbstractThis paper proposes a general framework for decomposing (without incorporating restrictive assumptions) the conventional Divisia index of productivity into for types of effects: technological, subequilibrium, scale, and so -called "market" effects or mark-ups. We believe, however, that this last component is due to a "defect" in the aggregation of the productions in the Divisia index itself, in situations where the conditions of long-run competitive equilibrium are not meet in the product markets. Therefore we adjust the index and conclude with a decomposition equation (with technical subequilibrium and scale effects) which is flexible and generic. Use of the framework is illustrated empirical for the Spanish energy mining sector.
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Bibliographic InfoPaper provided by University of Santiago de Compostela. Faculty of Economics and Business. Econometrics. in its series Economic Development with number 41.
Length: 27 pages
Date of creation: 1999
Date of revision:
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the Divisia index; total factor productivity;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-01-22 (All new papers)
- NEP-EFF-2002-01-22 (Efficiency & Productivity)
- NEP-MIC-2002-01-22 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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