Global- and Biennial Malmquist Indexes with a Location Favourability Decomposition

In this paper we propose alternative decompositions of the Global Malmquist Index of Pastor and Lovell (2005) and the Biennial Malmquist Index of Pastor et al. (2011). The decompositions include a location favourability component, indicating whether the observation under analysis is located in a part of the technology where the contemporaneous frontier is closer than average to the global frontier, or closer than average to the biennial frontier. The suggested decompositions of the two indexes are illustrated using an empirical case of Danish dairy farms, divided into organic and conventional producers.