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Nonparametric Measurement of Productivity Growth and Technical Change

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  • Subhash C. Ray

Abstract

The three main components of productivity change are technical change, change in technical efficiency, and returns to scale effects. Solow measured productivity change at the macroeconomic level as the difference between the growth rates of output and input which, under constant returns to scale and in the absence of any technical inefficiency, is a measure of technical change. The focus in this monograph is on the individual firm and both technical inefficiency and variable returns to scale are accommodated.ratesindexesIn neoclassical production economics, productivity change can be measured alternatively from the production, cost, profit, or distance functions. In continuous time analysis, one measures the of productivity and technical change. In discrete time, one measures of productivity and technical change over time. This work describes the Tornqvist, Fisher, and Malmquist productivity indexes along with the Luenberger productivity indicator and a Geometric Young index and how they relate to one another. The relevant nonparametric DEA models for measuring the different productivity indexes are formulated for nonparametric analysis of productivity, technical change, and change in efficiency.

Suggested Citation

  • Subhash C. Ray, 2024. "Nonparametric Measurement of Productivity Growth and Technical Change," Foundations and Trends(R) in Econometrics, now publishers, vol. 13(2), pages 67-169, August.
    • Handle: RePEc:now:fnteco:0800000045
    DOI: 10.1561/0800000045
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    References listed on IDEAS

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    1. Victoria Shestalova, 2003. "Sequential Malmquist Indices of Productivity Growth: An Application to OECD Industrial Activities," Journal of Productivity Analysis, Springer, vol. 19(2), pages 211-226, April.
    2. 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 1033-1039, December.
    3. Ray, Subhash C., 2015. "Nonparametric measures of scale economies and capacity utilization: An application to U.S. manufacturing," European Journal of Operational Research, Elsevier, vol. 245(2), pages 602-611.
    4. Ray, Subhash C & Mukherjee, Kankana, 1996. "Decomposition of the Fisher Ideal Index of Productivity: A Non-parametric Dual Analysis of US Airlines Data," Economic Journal, Royal Economic Society, vol. 106(439), pages 1659-1678, November.
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