A new, transitive productivity index

The Malmquist productivity index is not transitive. This paper argues that, instead of trying to accommodate this two-period concept to a multi-period setting, it is preferable to look at the measurement of productivity, efficiency, and technical change in a multi-period setting from the outset. A new, transitive productivity index is developed with as by-product a measure of the non-neutrality of technical change. The various indices are illustrated on panel data of Swedish pharmacies.At the time of writing, R. Althin was employed by The Swedish Institute for Health Economics. The views expressed in this paper are those of the authors and do not necessarily reflect the policies of Statistics Netherlands or The Swedish Institute for Health Economics.