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Modified Malmquist Productivity Index Based on Present Time Value of Money

Author

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  • Farhad Hosseinzadeh Lotfi
  • Golamreza Jahanshahloo
  • Mohsen Vaez-Ghasemi
  • Zohreh Moghaddas

Abstract

Data envelopment analysis (DEA) models can calculate the Malmquist Productivity Index (MPI). Classic Malmquist Productivity Index shows regress and progress of a DMU in different periods with efficiency and technology variations without considering the present value of money. This issue is of major importance since while a currency of in previous year is not equal to that of now this would yield bias results which can affect the correct interpretation. The index developed here is defined in terms of Modified Malmquist Productivity Index model, which can calculate progress and regress by using the factor of present time value of money. The incorporation of present time value of money is also calculated within the framework of data envelopment analysis. This factor is fundamental and should be considered in DEA Malmquist Productivity Index. Moreover, here, differences between presented models are compared to those of previous ones indeed, biased results will be shown in the case study in banks, and problem and solution have been investigated in the literature.

Suggested Citation

  • Farhad Hosseinzadeh Lotfi & Golamreza Jahanshahloo & Mohsen Vaez-Ghasemi & Zohreh Moghaddas, 2013. "Modified Malmquist Productivity Index Based on Present Time Value of Money," Journal of Applied Mathematics, John Wiley & Sons, vol. 2013(1).
    • Handle: RePEc:wly:jnljam:v:2013:y:2013:i:1:n:607190
    DOI: 10.1155/2013/607190
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    References listed on IDEAS

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    Cited by:

    1. Ghasem Tohidi & Shabnam Razavyan & Simin Tohidnia, 2014. "Profit Malmquist Index and Its Global Form in the Presence of the Negative Data in DEA," Journal of Applied Mathematics, John Wiley & Sons, vol. 2014(1).
    2. F. Hosseinzadeh Lotfi & Z. Taeb & S. Abbasbandy, 2014. "Progress and Regress of Time Dependent Data and Application in Bank Branch," Journal of Applied Mathematics, John Wiley & Sons, vol. 2014(1).

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