Abstract
The Divisia index, it its modern application, is a continuous-time index related to an underlying economic structure via a potential function. Under certain conditions, the index can retrieve important characteristics of the underlying structure using prices and quantities alone, without full knowledge about the structure itself. The Divisia index is widely used in theoretical discussions of productivity analysis, and has important applications elsewhere. In practice, it is approximated by discrete–time superlative indexes, like the Tornqvist, or by chain indexes. Older applications of the Divisia stressed its discrete-time axiomatic properties.
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Hulten, C.R. (2018). Divisia Index. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_350
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DOI: https://doi.org/10.1057/978-1-349-95189-5_350
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