Decomposing Bjurek Productivity Indexes into Explanatory Factors

42 Pages Posted: 7 Jul 2014

See all articles by W. Erwin Diewert

W. Erwin Diewert

University of British Columbia (UBC) - Department of Economics; National Bureau of Economic Research (NBER)

Kevin J. Fox

UNSW Australia Business School, School of Economics

Date Written: June 24, 2014

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

JEL Classification: C43, D24, E23

Suggested Citation

Diewert, W. Erwin and Fox, Kevin J., Decomposing Bjurek Productivity Indexes into Explanatory Factors (June 24, 2014). UNSW Australia Business School Research Paper No. 2014-33. Available at SSRN: https://ssrn.com/abstract=2460567 or http://dx.doi.org/10.2139/ssrn.2460567

W. Erwin Diewert

University of British Columbia (UBC) - Department of Economics ( email )

997-1873 East Mall
Vancouver, BC V6T 1Z1
Canada
604-822-2544 (Phone)
604-822-5915 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Kevin J. Fox (Contact Author)

UNSW Australia Business School, School of Economics ( email )

High Street
Sydney, NSW 2052
Australia
(02)9385-3320 (Phone)
(02)9313-6337 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
62
Abstract Views
396
rank
353,767
PlumX Metrics