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The Luenberger productivity indicator: An economic specification leading to infeasibilities

  • Briec, Walter
  • Kerstens, Kristiaan

This contribution points out an error in the specification of technology when computing the Luenberger productivity indicator that has been hitherto ignored in the literature. The solution of this problem increases the likelihood that the directional distance functions underlying this productivity indicator are ill-defined.

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Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 26 (2009)
Issue (Month): 3 (May)
Pages: 597-600

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Handle: RePEc:eee:ecmode:v:26:y:2009:i:3:p:597-600
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  1. Jean-Paul Chavas & Kwansoo Kim, 2007. "Measurement and Sources of Economies of Scope: A Primal Approach," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(3), pages 411-427, September.
  2. S. Managi, 2003. "Luenberger and Malmquist productivity indices in Japan, 1955-1995," Applied Economics Letters, Taylor & Francis Journals, vol. 10(9), pages 581-584.
  3. Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
  4. Walter Briec & Kristiaan Kerstens, 2008. "Infeasibility and Directional Distance Functions with Application to the Determinateness of the Luenberger Productivity Indicator," Working Papers 2008-ECO-11, IESEG School of Management.
  5. Peter Bogetoft & Dexiang Wang, 2005. "Estimating the Potential Gains from Mergers," Journal of Productivity Analysis, Springer, vol. 23(2), pages 145-171, 05.
  6. Guironnet, J.-P. & Peypoch, N., 2007. "Human capital allocation and overeducation: A measure of French productivity (1987, 1999)," Economic Modelling, Elsevier, vol. 24(3), pages 398-410, May.
  7. Walter Briec & K. Kerstens, 2009. "Infeasibilities and directional distance functions: with application to the determinateness of the luenberger productivity indicator," Post-Print hal-00372560, HAL.
  8. Mukherjee, Kankana & Ray, Subhash C. & Miller, Stephen M., 2001. "Productivity growth in large US commercial banks: The initial post-deregulation experience," Journal of Banking & Finance, Elsevier, vol. 25(5), pages 913-939, May.
  9. Rikard Althin, 2001. "Measurement of Productivity Changes: Two Malmquist Index Approaches," Journal of Productivity Analysis, Springer, vol. 16(2), pages 107-128, September.
  10. Chambers, Robert G. & Fare, Rolf & Grosskopf, Shawna, 1996. "Productivity Growth in APEC Countries," Working Papers 197843, University of Maryland, Department of Agricultural and Resource Economics.
  11. Robert G. Chambers & Rulon D. Pope, 1996. "Aggregate Productivity Measures," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(5), pages 1360-1365.
  12. Jean-Philippe Boussemart & Walter Briec & Kristiaan Kerstens & Jean-Christophe Poutineau, 2003. "Luenberger and Malmquist Productivity Indices: Theoretical Comparisons and Empirical Illustration," Bulletin of Economic Research, Wiley Blackwell, vol. 55(4), pages 391-405, October.
  13. Banker, Rajiv D & Maindiratta, Ajay, 1988. "Nonparametric Analysis of Technical and Allocative Efficiencies in Production," Econometrica, Econometric Society, vol. 56(6), pages 1315-32, November.
  14. Emili Tortosa Ausina, 2002. "Sensitivity Analysis Of Efficiency And Malmquist Productivity Indices: An Application To Spanish Savings Banks," Working Papers. Serie EC 2002-30, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
  15. Atkinson, Scott E & Cornwell, Christopher & Honerkamp, Olaf, 2003. "Measuring and Decomposing Productivity Change: Stochastic Distance Function Estimation versus Data Envelopment Analysis," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(2), pages 284-94, April.
  16. Simar, Leopold & Wilson, Paul W., 1999. "Estimating and bootstrapping Malmquist indices," European Journal of Operational Research, Elsevier, vol. 115(3), pages 459-471, June.
  17. 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, vol. 50(6), pages 1393-1414, November.
  18. Robert G. Chambers, 2002. "Exact nonradial input, output, and productivity measurement," Economic Theory, Springer, vol. 20(4), pages 751-765.
  19. Jose Zofio & C. A. Knox Lovell, 2001. "Graph efficiency and productivity measures: an application to US agriculture," Applied Economics, Taylor & Francis Journals, vol. 33(11), pages 1433-1442.
  20. Nakano, Makiko & Managi, Shunsuke, 2008. "Regulatory reforms and productivity: An empirical analysis of the Japanese electricity industry," Energy Policy, Elsevier, vol. 36(1), pages 201-209, January.
  21. Charles R. Hulten, 2001. "Total Factor Productivity: A Short Biography," NBER Chapters, in: New Developments in Productivity Analysis, pages 1-54 National Bureau of Economic Research, Inc.
  22. Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-39, December.
  23. Carlos Pestana Barros & Nicolas Peypoch, 2007. "Comparing Productivity Change in Italian and Portuguese Seaports using the Luenberger Indicator Approach," Maritime Economics and Logistics, Palgrave Macmillan, vol. 9(2), pages 138-147, June.
  24. Fare, Rolf & Grosskopf, Shawna & Norris, Mary, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Reply," American Economic Review, American Economic Association, vol. 87(5), pages 1040-43, December.
  25. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-97, May.
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