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The Dynamic Luenberger-Hicks-Moorsteen Productivity Indicator With An Application To Dairy Farms In South West England

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  • Ang, Frederic
  • Kerstens, Pieter Jan

Abstract

Abstract. This paper introduces a dynamic Luenberger-Hicks-Moorsteen (LHM) productivity indicator that takes into account the adjustment costs of changing the level of quasi-fixed capital inputs. Being additively complete in the dynamic sense, the LHM indicator is decomposed into contributions of outputs, variable inputs and investments in dynamic factors. Moreover, we decompose the LHM indicator into technical change, technical inefficiency change and scale ineffi-ciency change using an investment-, output- and input-direction. Employing a nonparametric framework, the empirical application focuses on the dairy sector in South West England over the period 2001 − 2014.

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  • Ang, Frederic & Kerstens, Pieter Jan, 2017. "The Dynamic Luenberger-Hicks-Moorsteen Productivity Indicator With An Application To Dairy Farms In South West England," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260831, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae17:260831
    DOI: 10.22004/ag.econ.260831
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    1. Frederic Ang & Pieter Jan Kerstens, 2016. "To Mix or Specialise? A Coordination Productivity Indicator for English and Welsh farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(3), pages 779-798, September.
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