Biased Technical Change and the Malmquist Productivity Index

R. Fare, E. Grifell-Tatje, S. Grosskopf and C.A.K. Lovell

Microeconomics from EconWPA

Abstract: The Malmquist productivity index has many attractive features. One is that it decomposes into a technical efficiency change index and a technical change index. Under constant returns to scale, its technical efficiency change index has been decomposed into a "pure" technical efficiency change index, a scale efficiency change index, and a congestion change index. Here we maintain the same assumption, and we decompose its technical change index into a magnitude index and a bias index. We then decompose the bias index into an output bias index and an input bias index, and we state conditions under which either bias index makes no contribution to productivity change.

Keywords: productivity; technical change; Malmquist index (search for similar items in EconPapers)
JEL-codes: G2 O3 (search for similar items in EconPapers)
Date: 1995-08-19, Revised 1995-08-22
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