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Multilateral productivity comparisons and homotheticity


  • A. Peyrache

    () (CEPA - School of Economics, The University of Queensland)


In this paper it is shown that a well known procedure (GEKS) of transitivizing a bilateral system of productivity comparisons is implicitly a way of imposing a homothetic structure onto the data. The main implication of this result is that deviations between the bilateral and the multilateral (GEKS) indexes can be interpreted as a measure of local deviation from the homothetic assumption. This establishes an additional link between homotheticity and transitivity

Suggested Citation

  • A. Peyrache, 2010. "Multilateral productivity comparisons and homotheticity," CEPA Working Papers Series WP112010, School of Economics, University of Queensland, Australia.
  • Handle: RePEc:qld:uqcepa:57

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    References listed on IDEAS

    1. D. S. Prasada Rao, 2005. "On The Equivalence Of Weighted Country-Product-Dummy (Cpd) Method And The Rao-System For Multilateral Price Comparisons," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 571-580, December.
    2. repec:pri:rpdevs:deaton_pppp_version_aug_06 is not listed on IDEAS
    3. Erwin Diewert, 2005. "Weighted Country Product Dummy Variable Regressions And Index Number Formulae," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(4), pages 561-570, December.
    4. Hill, R., 1995. "Chained PPPs and Minimum Spanning Trees," Papers 95/40, New South Wales - School of Economics.
    5. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
    6. Selvanathan, E. A. & Prasada Rao, D. S., 1992. "An econometric approach to the construction of generalized Theil-Tornqvist indices for multilateral comparisons," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 335-346.
    7. Clements, Kenneth W & Izan, H Y, 1981. "A Note on Estimating Divisia Index Numbers," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 22(3), pages 745-747, October.
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