Measuring Malmquist productivity index: A new approach based on double frontiers data envelopment analysis

This paper proposes a new approach to measuring Malmquist productivity index (MPI) by using both optimistic and pessimistic data envelopment analyses (DEA) simultaneously, which we refer to as the double frontiers data envelopment analysis (DFDEA). The MPIs measured from the two different DEA points of view are geometrically averaged to generate an integrated MPI, which we refer to as the DFDEA-based MPI. This DFDEA-based MPI reflects the productivity changes of decision making units (DMUs) over time more truly and more comprehensively than the traditional optimistic DEA-based MPI. The proposed new approach is tested with a numerical example and applied to the productivity analysis of the industrial economy of China. (C) 2011 Elsevier Ltd. All rights reserved.