Primal and dual dynamic Luenberger productivity indicators

This paper develops primal and dual versions of the dynamic Luenberger productivity growth measures that are based on the dynamic directional distance function and intertemporal cost minimization, respectively. The empirical application focuses on panel data of Dutch dairy farms over the period 1995–2005. Primal dynamic Luenberger productivity growth averages 1.5 percent annually in the period under investigation, with technical change being the main driver of annual change. Dual dynamic Luenberger productivity growth is −0.1 percent in the same period. Improvements in technical inefficiency and technical change are partly counteracted by deteriorations of allocative inefficiency, with large dairy farms presenting a slightly higher productivity growth than small dairy farms.