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Aggregation of Efficiency Indices

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  • Charles Blackorby
  • R. Russell

Abstract

Measurement of technical efficiency is carried out at many levels of aggregation—at the individual branch, plant, division, or district level; at the company- or organization-wide level; at the industry or sectoral level; or at the economy-wide level. In this paper, we examine the conditions under which these indexes constructed at various levels of aggregation can be consistent with one another—that is, the extent to which efficiency indexes can be consistently aggregated. Unfortunately, our results are discouraging, indicating that very strong restrictions on the technology and/or the efficiency index itself are required to enable consistent aggregation (or disaggregation). Copyright Kluwer Academic Publishers 1999

Suggested Citation

  • Charles Blackorby & R. Russell, 1999. "Aggregation of Efficiency Indices," Journal of Productivity Analysis, Springer, vol. 12(1), pages 5-20, August.
    • Handle: RePEc:kap:jproda:v:12:y:1999:i:1:p:5-20
    DOI: 10.1023/A:1007848122559
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    References listed on IDEAS

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    Keywords

    Aggregation; Technical efficiency;

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