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The Choice of Index Numbers in Measuring Agricultural Productivity: A Canadian Empirical Case Study

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  • Fantino, Alberto A.
  • Weeman, Terrence S.

Abstract

The measurement of agricultural productivity is important in understanding growth in agriculture and in assessing competitiveness. In this paper, some difficulties related to the empirical measurement of productivity are analyzed using a Canadian case study. The paper focuses in particular on the choice of index number procedures, comparing traditional fixed base weight indexes with flexible or superlative indexes such as the Divisia and Fisher. Indexes of aggregate agricultural output, total farm input use, and total factor productivity are estimated for Canada and for the prairie region of western Canada from 1948 to 1991. Alternative productivity growth rates are reported and compared. The productivity results based on the Tornqvist-Theil approximation to the Divisia index and the chained Fisher index are very similar. Both these flexible weight index procedures are to be preferred over the Laspeyres, the most commonly used approach in Canada.

Suggested Citation

  • Fantino, Alberto A. & Weeman, Terrence S., 1997. "The Choice of Index Numbers in Measuring Agricultural Productivity: A Canadian Empirical Case Study," 1997 Occasional Paper Series No. 7 198061, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaaeo7:198061
    DOI: 10.22004/ag.econ.198061
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    References listed on IDEAS

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    1. Hulten, Charles R, 1973. "Divisia Index Numbers," Econometrica, Econometric Society, vol. 41(6), pages 1017-1025, November.
    2. Eldon Ball, 1992. "Sources of Agricultural Economic Growth and Productivity: Discussion," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(3), pages 764-765.
    3. Laurits R. Christensen, 1975. "Concepts and Measurement of Agricultural Productivity," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(5), pages 910-915.
    4. Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
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    Keywords

    Agribusiness; Productivity Analysis;

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