Measuring the Productivity of the Construction Industry in China by Using DEA-Based Malmquist Productivity Indices

Abstract

Data envelopment analysis (DEA) measures the relative efficiency of decision-making units and avoids any functional specification to express production relationship between inputs and outputs. DEA-based Malmquist productivity index (MPI) measures the productivity change over time. In this paper, the MPI is used to measure the productivity changes of Chinese construction industry from 1997 to 2003. The results of analyses indicate that productivity of the Chinese construction industry experienced a continuous improvement from 1997 to 2003 except for a decline from 2001 to 2002. It is found that there are gaps in productivity development level among western, midland, eastern, and northeastern regions in the Chinese construction industry. The DEA-based MPI approach provides a good tool to support setting up policies and strategic decisions for improving the performance of the Chinese construction industry and promoting the sustainable development of the industry between different regions.