On aggregation of multi-factor productivity indexes

Rolf Färe and Valentin Zelenyuk
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Rolf Färe: Oregon State University

Journal of Productivity Analysis, 2021, vol. 55, issue 2, No 4, 107-133

Abstract: Abstract The goal of this paper is to investigate the question of the importance of aggregation of the Paasche and Laspeyres versions of the Malmquist quantity and productivity indexes from both theoretical and empirical perspectives. We discuss the existing justification and provide an alternative theoretical justification based on results from the functional equations literature. We also use real data (from Kumar and Russell (2002, American Economic Review)) to illustrate how dramatic the differences in conclusions can be in practice, depending on whether one employs Laspeyres or Paasche productivity indexes.

Keywords: Fisher; Laspeyres; Paasche; Malmquist; Productivity indexes; D24; E22; E23; E24; O47 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s11123-021-00598-w

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