An Aggregation Paradigm for Hicks-Moorsteen Productivity Indexes

In this paper we consider the problem of aggregation of Hicks-Moorsteen productivity indexes. The aggregate indexes are derived in a manner which is justified by economic theory, consistent with previous aggregation results, and maintains analogous decompositions to the original measures. These aggregate Hicks-Moorsteen productivity indexes allow researchers to consider the change in group productivity over time, with and without allowing full reallocation of inputs and outputs. We illustrate these indexes with an application to the productivity of countries, demonstrating the difference between the group index and the frequently used simple average.