EFFICIENCY, QUANTITY INDEXES, AND PRODUCTIVITY INDEXES: A SYNTHESIS

EFFICIENCY, QUANTITY INDEXES, AND PRODUCTIVITY INDEXES: A SYNTHESIS R. Chambers,* R. Fare, ** and S. Grosskopf ** INTRODUCTION The purpose of this paper is to provide a unified discussion of efficiency, productivity and quantity indexes. Intuitively, these notions are clearly related, but, in practice economists generally do not recognize these interrelationships. As a result, the casual observer sees work in these areas as distinct and somewhat ad hoc. Recent work by Caves, Christensen, and Diewert (CCD) (1982) has contributed to a rehabilitation of what we shall call the index number approach to measuring productivity. They address the ‘ad hoc’ problem associated with that approach by showing that the Tornqvist index, in addition to being simple to compute, is also consistent with a flexible representation (translog)of the underlying technology. Thus, the Tornqvist is a ‘superlative’index and not just an ad hoc approximation of technology (and changes in technology). Their starting point in substantiating their claim is Shephard’s (1953) distance function, which completely and generally describes any technology including those with many inputs and many outputs. Distance functions are also useful because of their dual relationship to value functions, e.g., the cost function. We show that the distance function is the unifying notion which links efficiency measures, quantity http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Bulletin of Economic Research Wiley

EFFICIENCY, QUANTITY INDEXES, AND PRODUCTIVITY INDEXES: A SYNTHESIS

Loading next page...
 
/lp/wiley/efficiency-quantity-indexes-and-productivity-indexes-a-synthesis-NiS3gqbpe7
Publisher
Wiley
Copyright
Copyright © 1994 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0307-3378
eISSN
1467-8586
D.O.I.
10.1111/j.1467-8586.1994.tb00575.x
Publisher site
See Article on Publisher Site

Abstract

R. Chambers,* R. Fare, ** and S. Grosskopf ** INTRODUCTION The purpose of this paper is to provide a unified discussion of efficiency, productivity and quantity indexes. Intuitively, these notions are clearly related, but, in practice economists generally do not recognize these interrelationships. As a result, the casual observer sees work in these areas as distinct and somewhat ad hoc. Recent work by Caves, Christensen, and Diewert (CCD) (1982) has contributed to a rehabilitation of what we shall call the index number approach to measuring productivity. They address the ‘ad hoc’ problem associated with that approach by showing that the Tornqvist index, in addition to being simple to compute, is also consistent with a flexible representation (translog)of the underlying technology. Thus, the Tornqvist is a ‘superlative’index and not just an ad hoc approximation of technology (and changes in technology). Their starting point in substantiating their claim is Shephard’s (1953) distance function, which completely and generally describes any technology including those with many inputs and many outputs. Distance functions are also useful because of their dual relationship to value functions, e.g., the cost function. We show that the distance function is the unifying notion which links efficiency measures, quantity

Journal

Bulletin of Economic ResearchWiley

Published: Jan 1, 1994

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 18 million articles from more than
15,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Search

Query the DeepDyve database, plus search all of PubMed and Google Scholar seamlessly

Organize

Save any article or search result from DeepDyve, PubMed, and Google Scholar... all in one place.

Access

Get unlimited, online access to over 18 million full-text articles from more than 15,000 scientific journals.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve

Freelancer

DeepDyve

Pro

Price

FREE

$49/month
$360/year

Save searches from
Google Scholar,
PubMed

Create lists to
organize your research

Export lists, citations

Read DeepDyve articles

Abstract access only

Unlimited access to over
18 million full-text articles

Print

20 pages / month

PDF Discount

20% off