Scandinavian Working Papers in Economics

Working Paper Series,
Swedish University of Agricultural Sciences, Department Economics

No 2017:1: Exact and superlative measurement of the Luenberger- Hicks-Moorsteen productivity indicator

Frederic Ang () and Peter Jan Kerstens
Additional contact information
Frederic Ang: Department of Economics, Swedish University of Agricultural Sciences, Postal: Box 7013, Swedish University of Agricultural Sciences, SE-750 07 Uppsala, Sweden
Peter Jan Kerstens: Center for Economic Studies, Postal: KU Leuven, E. Sabbelaan 53, B-8500 Kortrijk,, Belgium,

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; diff erence based indicator; total factor productivity; exact and superlative approximation

JEL-codes: C43; D21; D24

20 pages, July 2, 2017

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