A cost Malmquist productivity index

Nikolaos Maniadakis, Emmanuel Thanassoulis*

*Corresponding author for this work

Research output: Contribution to journalArticle

Abstract

This paper develops a productivity index applicable when producers are cost minimisers and input prices are known. The index is inspired by the Malmquist index as extended to productivity measurement. The index developed here is defined in terms of input cost rather than input quantity distance functions. Hence, productivity change is decomposed into overall efficiency and cost technical change. Furthermore, overall efficiency change is decomposed into technical and allocative efficiency change and cost technical change into a part capturing shifts of input quantities and shifts of relative input prices. These decompositions provide a clearer picture of the root sources of productivity change. They are illustrated here in a sample of hospitals; results are computed using non-parametric mathematical programming. © 2003 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)396-409
Number of pages14
JournalEuropean Journal of Operational Research
Volume154
Issue number2
DOIs
Publication statusPublished - 16 Apr 2004

Keywords

  • allocative efficiency
  • data envelopment analysis
  • malmquist index
  • productivity change

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