Accounting for Bads in the Measurement of Productivity Growth: A Cost Indirect Malmquist Productivity Measure and it Application to U.S. Agriculture

V. Eldon Ball, Rolf Fare, Shawna Grosskopf, Osman Zaim () and Richard F. Nehring

No 20442, 2001 Annual meeting, August 5-8, Chicago, IL from American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association)

Abstract: This paper starts with the basic premise that the conventional measures of productivity growth, which ignore joint production of good and bad outputs, are biased. We then construct an alternative productivity growth measure using activity analysis. An application to U.S. agriculture demonstrates its usefulness. More specifically, we show that the Tornqvist index of productivity is biased upward when production of undesirable outputs or "bads" is increasing. Conversely, this same measure of productivity is biased downward when externalities in production are decreasing.

Keywords: Productivity; Analysis (search for similar items in EconPapers)
Pages: 39
Date: 2001
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea01:20442

DOI: 10.22004/ag.econ.20442

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