Productivity in the Hotel Industry: An Order-α Malmquist Productivity Indicator

Abstract

In the literature, it is highlighted that the deterministic nature of the data envelopment analysis–based productivity measures makes them sensitive to sample characteristics. However, the majority of the related empirical studies ignore the potential bias in their data envelopment analysis–based productivity estimations. This article illustrates how the order-α quantile-type estimators can be applied to construct a robust version of the Malmquist productivity indices. Using the order-α estimators, we construct a Malmquist productivity index alongside with two well-known decompositions. The proposed productivity indicator is less sensitive to potential outliers and extreme values. Then, as an illustrative example, we apply the quantile-type productivity index on a sample of 270 hotels operating in the Balearic Islands over the period 2004-2013. The productivity levels alongside with their components are analyzed during the global financial crisis period. © The Author(s) 2020.