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Productivity Paradoxes and Their Resolution

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  • Shlomo Maital
  • Alexander Vaninsky

Abstract

Foran objective function, how should each argument be assigned itsappropriate role in the change of the objective function, whenthe arguments are interrelated? In this paper, it is shown thatthe commonly used approaches may lead to results contradictoryto straightforward economic reasoning, and hence generating paradoxes.We begin with a known paradox of structural change—whenan increase in the relative weight of inexpensive goods appearsformally to generate an increase in average price. A new methodof partitioning changes in an objective function is introducedthat eliminates such paradoxes. Our method is illustrated withnumerical examples. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Shlomo Maital & Alexander Vaninsky, 2000. "Productivity Paradoxes and Their Resolution," Journal of Productivity Analysis, Springer, vol. 14(3), pages 191-207, November.
    • Handle: RePEc:kap:jproda:v:14:y:2000:i:3:p:191-207
    DOI: 10.1023/A:1026542719694
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    References listed on IDEAS

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    1. repec:bla:scandj:v:85:y:1983:i:2:p:239-47 is not listed on IDEAS
    2. Maital, Shlomo & Vaninsky, Alexander, 1999. "Data envelopment analysis with a single DMU: A graphic projected-gradient approach," European Journal of Operational Research, Elsevier, vol. 115(3), pages 518-528, June.
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    Cited by:

    1. Alexander Vaninsky, 2018. "Optimal environment-friendly economic restructuring: the United States–China cooperation case study," Economic Change and Restructuring, Springer, vol. 51(3), pages 189-220, August.
    2. Vaninsky, Alexander, 2014. "Factorial decomposition of CO2 emissions: A generalized Divisia index approach," Energy Economics, Elsevier, vol. 45(C), pages 389-400.
    3. Boratyński, Jakub, 2021. "Decomposing structural decomposition: The role of changes in individual industry shares," Energy Economics, Elsevier, vol. 103(C).

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