Hicks-Moorsteen versus Malmquist: a connection by means of a radial productivity index

Hicks-Moorsteen versus Malmquist: a connection by means of a radial productivity index

0.00 Avg rating0 Votes
Article ID: iaor2014802
Volume: 41
Issue: 3
Start Page Number: 435
End Page Number: 442
Publication Date: Jun 2014
Journal: Journal of Productivity Analysis
Authors:
Keywords: management
Abstract:

A primal index of productivity change is introduced which decomposes exactly into three components: technical change, technical efficiency change and average scale economies (radial scale change). The productivity index is defined using variations of the distance function along pre‐assigned input–output rays and, for this reason, it is deemed a radial productivity index (RPI). It is proven that: first, the RPI index collapses to the Malmquist productivity index when the technology is constant returns to scale (CRS); second the RPI index equals the Hicks‐Moorsteen productivity index under homotheticity of technology (and non‐CRS). The key to these results is a new definition and measure of the contribution of scale economies to productivity change.

Reviews

Required fields are marked *. Your email address will not be published.