Diewert and Fox (2013) proposed decompositions of a Malmquist-type productivity index into explanatory factors, with a focus on extracting technical progress, technical efficiency change and returns to scale components. A major problem with their decompositions is that it may be difficult to...

This chapter reviews the theory underlying the index number approaches used by National Statistical Offices in the construction of productivity indexes. It covers approaches for measuring output, labour and capital and highlights persistent and emerging measurement problems.