Author(s)

R. G. Chambers¹, R. Färe², S. Grosskopf^2,3

¹University of Maryland, College Park, USA.
²Oregon State University, Corvallis, USA.
³CERE, Umeå, Sweden.

This short paper brings together two literatures: the first is the Lerner Index as a measure of imperfect competition familiar from industrial organization and the second is a measure of performance from the efficiency literature, namely the Nerlovian indicator. We show how these may be related and the resulting decomposition of the Lerner index which results.

Lerner Index, Nerlovian Indicator, Profit Efficiency

Chambers, R. , Färe, R. and Grosskopf, S. (2014) The Lerner Index and Economic Efficiency. Theoretical Economics Letters, 4, 803-805. doi: 10.4236/tel.2014.49101.