Decomposing Bjurek Productivity Indexes into Explanatory Factors

Walter Diewert and Kevin Fox

No 2014-33, Discussion Papers from School of Economics, The University of New South Wales

Abstract: Caves, Christensen, Diewert introduced Malmquist output, input and productivity indexes into production theory in a systematic way. This paper revisits the debate on how to decompose Bjurek’s concept of a Malmquist productivity index into explanatory factors, with a focus on extracting technical progress, technical efficiency change, and returns to scale components. In order to define these components, a reference technology is required. The paper does not make any convexity assumptions on the reference technology but instead follows the example of Tulkens and his coauthors in assuming that the reference technology satisfies free disposability assumptions. The existence and properties of the underlying distance functions of the productivity decomposition are proven under relatively unrestrictive assumptions. The paper provides for the first time a theoretical justification for the geometric average form of the Bjurek productivity index.

Keywords: Productivity indexes; Malmquist indexes; technical efficiency; technical progress; returns to scale; Data Envelopment Analysis; Free Disposal Hulls; nonparametric approaches to production theory; distance functions (search for similar items in EconPapers)
JEL-codes: C43 D24 E23 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2014-06
New Economics Papers: this item is included in nep-eff and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Decomposing Bjurek Productivity Indexes into Explanatory Factors (2014)
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