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A note on the choice of Malmquist productivity index and Malmquist total factor productivity index

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  • Halkos, George
  • Tzeremes, Nickolaos

Abstract

This paper by analyzing the two popular methodologies of productivity measurement provides an example that illustrates the differences when adopting the two methodologies. Furthermore, under the restriction of constant returns to scale raises some methodological issues regarding the theory of productivity measurement using the Malmquist Productivity Index and Malmquist Total Factor Productivity Index. Furthermore by using an illustrative example under the restriction of constant returns to scale the study indicates that the two indexes produce similar results. However, the differences observed are determining the choice of the methodology adopted when measuring productivity.

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File URL: http://mpra.ub.uni-muenchen.de/32083/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 32083.

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Date of creation: Sep 2006
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Handle: RePEc:pra:mprapa:32083

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Keywords: Productivity measurement; Malmquist Productivity Index; Malmquist Total Factor Productivity Index;

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  1. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, Econometric Society, vol. 50(6), pages 1393-1414, November.
  2. Bjurek, Hans, 1996. " The Malmquist Total Factor Productivity Index," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 98(2), pages 303-13, June.
  3. David Lambert, 1999. "Scale and the Malmquist productivity index," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 6(9), pages 593-596.
  4. Fare, Rolf & Grosskopf, Shawna & Roos, Pontus, 1996. "On two definitions of productivity," Economics Letters, Elsevier, Elsevier, vol. 53(3), pages 269-274, December.
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