A note on decomposing the Malmquist productivity index by means of subvector homotheticity

Kathy Hayes, Rolf Färe (), Shawna Grosskopf, Finn Førsund and Almas Heshmati ()
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Kathy Hayes: Dedman College, Southern Methodist University, Dallas, TX 75275, USA
Rolf Färe: Department of Economics and Department of Agricultural and Resource Economics, Oregon State University, Corvallis, OR 97331-3612, USA

Economic Theory, 2001, vol. 17, issue 1, 239-245

Abstract: This paper introduces a decomposition of the Malmquist productivity index into component indexes. The motivation is to derive an analogue of the decomposition of the Törnqvist index into productivity and quality change provided by Fixler and Zieschang (1992) to the Malmquist index. Since we employ no second order approximations, this decomposition requires additional structure, namely a generalized version of Shephard's (1970) inverse homotheticity, which we dub subvector homotheticity. We show that subvector homotheticity is necessary and sufficient for our decomposition.

Keywords: Malmquist productivity; Decomposition; Subvector homotheticity. (search for similar items in EconPapers)
JEL-codes: C23 D24 (search for similar items in EconPapers)
Date: 2000-11-14
Note: Received: July 10, 1998; revised version: August 11, 1999
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Citations: View citations in EconPapers (2)

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