Productivity in LDC Agriculture: Nonparametric Malmquist Measures

Lilyan E. Fulginiti, Richard K. Perrin
March 1994  [94-GATT 10]

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Fulginiti, L.E. and R. Perrin. 1994. "Productivity in LDC Agriculture: Nonparametric Malmquist Measures." CARD paper 94-GATT 10. Center for Agricultural and Rural Development, Iowa State University.


This paper examines changes in agricultural productivity in 18 developing countries over the period 1961 to 1985. Because input price series are not available, we use the concept of distance function and the nonparametric, quantity-based Malmquist index approach, and contrast the results with our previous Cobb-Douglas production function approach. The objective is to present an analysis of technological change that is less dependent on the parametric specification of the model. In average terms, the Malmquist constant-returns-to-scale approach indicates that half of these countries have experienced productivity declines. The partitioning of productivity into technical change and technical efficiency components indicates that negative technical change has been responsible for these declines, while most countries have experienced improvements in Farrell efficiency. In addition, countries that tax agriculture most heavily had the most negative rates of productivity change.