Measuring Technical Efficiency: Unveiling Total Factor Productivity with the OP Method

Technical level, often referred to as technical efficiency, represents the overall efficiency and productivity of a system. This crucial aspect can be effectively measured using the Output-Oriented Malmquist Index, commonly known as the OP method. By analyzing inputs and outputs, the OP method provides valuable insights into how efficiently resources are utilized to generate output, ultimately offering a quantifiable measure of total factor productivity.