Malmquist Productivity Index based on present time value of money

On basis of the Productivity Index" href="https://civilica.com/search/paper/k-Malmquist%20Productivity%20Index/">Malmquist Productivity Index (MPI), which can be calculated by data envelopment analysis'(DEA) models, total factor productivity (TFP) of a Decision Making Unit (DMU) is computed. Classic Productivity Index" href="https://civilica.com/search/paper/k-Malmquist%20Productivity%20Index/">Malmquist Productivity Index shows regress and progress of a DMU in different periods with efficiency and technology variations without considering the present value of money. This issue is of major importance since while a currency in last year in not equal to that of now and this would yield bias results which can affect the correct interpretation. The index developed here is defined in terms of Modified Productivity Index" href="https://civilica.com/search/paper/k-Malmquist%20Productivity%20Index/">Malmquist Productivity Index model, which can calculate progress and regress by using the factor of Present Time Value of Money. The incorporation of Present Time Value of Money isalso calculated within the framework of data envelopment analysis. Also, the differences of the presented models are compared to those of previous ones in deed and bias results will be shown in the case study in banks and problem and solution have been investigated in literature.

Keywords:

Malmquist Productivity Index , Time value of Money , Data Envelopment Analysis , Productivity