Luenberger and Malmquist Productivity Indices: Theoretical Comparisons and Empirical Illustration |
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Authors: | Jean Philippe Boussemart,Walter Briec,Kristiaan Kerstens, Jean Christophe Poutineau |
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Affiliation: | GREMARS, University of Lille 3,;JEREM, University of Perpignan,;CNRS‐LABORES, IESEG and;CERESUR, University of La Reunion |
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Abstract: | This contribution establishes, from a theoretical viewpoint, the relations between the Malmquist productivity indices, that measure in either input or output orientations, and the Luenberger productivity indices, that can simultaneously contract inputs and expand outputs, but that can also measure in either input or output orientations. The main result is that a Malmquist productivity index overestimates productivity changes, since it provides productivity measures that are nearly twice those given by the Luenberger productivity index looking for simultaneous contractions of inputs and expansions of outputs. This relationship is empirically illustrated using data from 20 OECD countries over the 1974–97 period. |
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Keywords: | technical change productivity growth Malmquist index Luenberger index proportional distance function |
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