On the circularity of the Malmquist productivity index

ICER Working Papers from ICER - International Centre for Economic Research

Abstract: Circularity is a desirable property of a productivity index seldom satisfied in available bilateral indices, such as the Malmquist index. Within a setting of micro units belonging to groups with group-specific frontier technology, the bilateral Malmquist productivity index is investigated. Our setting can be interpreted as representing cross section data, but also cross section, time series by identifying groups as time periods. A general proposition giving the condition for the Malmquist index to be circular is presented. When the condition is not met, ways of making the index transitive are explored. Four strategies adopted from the literature is followed; using one group as base, taking an average over possible bases, developing a multilateral index, and chain-linking. An expression of the Malmquist multilateral index is developed giving the difference between the Malmquist bilateral- and multilateral indexes.

Keywords: Circularity; transitivity; Malmquist productivity index; multilateral index; chain-linking (search for similar items in EconPapers)
JEL-codes: D24 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff
Date: Written 2002-06
View list of references

Downloads: (external link)
http://www.icer.it/docs/wp2002/forsund29-02.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Access Statistics for this paper

More papers in ICER Working Papers from ICER - International Centre for Economic Research
Address: Viale Settimio Severo, 63 - 10133 Torino - Italy
Contact information at EDIRC.
Series data maintained by Stefano T. Chiado' ().