Malmquist index

The Malmquist Index (MI) is a bilateral index that can be used to compare the production technology of two economies. It is named after Professor Sten Malmquist, on whose ideas it is based. It is also called the Malmquist Productivity Index. The Malmquist Index (MI) is a bilateral index that can be used to compare the production technology of two economies. It is named after Professor Sten Malmquist, on whose ideas it is based. It is also called the Malmquist Productivity Index. The MI is based on the concept of the Production function. This is a function of maximum possible production, with respect to a set of inputs pertaining to capital and labour. So, if S a {displaystyle S_{a}} is the set of labour and capital inputs to the production function of Economy A, and Q {displaystyle Q} is the production function of Economy A, we could write Q = f a ( S a ) {displaystyle Q=f_{a}(S_{a})} .