Exact and Superlative Measurement of the Luenberger-Hicks-Moorsteen Productivity Indicator

12 Pages Posted: 22 Jan 2017

See all articles by Frederic Ang

Frederic Ang

Department of Economics, Swedish University of Agricultural Sciences

Pieter Jan Kerstens

KU Leuven - Subfaculty of Economics and Applied Economics

Date Written: January 15, 2017

Abstract

This paper shows that the Bennet-Bowley profit indicator is an exact and superlative approximation of the additively complete Luenberger-Hicks-Moorsteen productivity indicator when the input and output directional distance functions can be represented up to the second order by a quadratic functional form. It also establishes the conditions under which the exact and superlative measures of the Luenberger productivity indicator and Luenberger-Hicks-Moorsteen productivity indicator coincide.

Keywords: Bennet-Bowley, difference-based indicator, total factor productivity, exact and superlative approximation

JEL Classification: C43, D21, D24

Suggested Citation

Ang, Frederic and Kerstens, Pieter Jan, Exact and Superlative Measurement of the Luenberger-Hicks-Moorsteen Productivity Indicator (January 15, 2017). Available at SSRN: https://ssrn.com/abstract=2902579 or http://dx.doi.org/10.2139/ssrn.2902579

Frederic Ang

Department of Economics, Swedish University of Agricultural Sciences ( email )

Box 7013
Uppsala, Uppsala 750 07
Sweden

Pieter Jan Kerstens (Contact Author)

KU Leuven - Subfaculty of Economics and Applied Economics ( email )

Etienne Sabbelaan 53
Kortrijk, B-8500
Belgium

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