Multilateral productivity comparisons and homotheticity

A. Peyrache (a.peyrache@uq.edu.au)
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A. Peyrache: CEPA - School of Economics, The University of Queensland

No WP112010, CEPA Working Papers Series from University of Queensland, School of Economics

Abstract: 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

Date: 2010-11
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Persistent link: https://EconPapers.repec.org/RePEc:qld:uqcepa:57

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