The Hicks-Moorsteen Productivity Index Satisfies the Determinateness Axiom.

Abstract

There are two total factor productivity indices available in the literature based on a primal notion of the technology. In a ratio tradition, these are the Malmquist and the HicksMoorsteen productivity indices. In a difference perspective, the Luenberger and Luenberger-Hicks-Moorsteen productivity indicators are based upon a sightly different concept. The purpose of this note is to establish that -in contrast to the Malmquist index- the Hicks-Moorsteen type of productivity index (as well as its difference-based counterpart) is well-defined and satisfies the determinateness property, since the underlying distance functions are always feasible.Malmquist productivity index, Hicks-Moorsteen productivity index, determinateness