Hicks-Moorsteen versus Malmquist: a connection by means of a radial productivity index

Antonio Peyrache ()

Journal of Productivity Analysis, 2014, vol. 41, issue 3, 435-442

Abstract: A primal index of productivity change is introduced which decomposes exactly into three components: technical change, technical efficiency change and average scale economies (radial scale change). The productivity index is defined using variations of the distance function along pre-assigned input–output rays and, for this reason, it is deemed a radial productivity index (RPI). It is proven that: first, the RPI index collapses to the Malmquist productivity index when the technology is constant returns to scale (CRS); second the RPI index equals the Hicks-Moorsteen productivity index under homotheticity of technology (and non-CRS). The key to these results is a new definition and measure of the contribution of scale economies to productivity change. Copyright Springer Science+Business Media New York 2014

Keywords: Productivity; CCD Malmquist; Hicks-Moorsteen; Average scale economies; D24 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (11)

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DOI: 10.1007/s11123-013-0350-2

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