A Duality theorem for the forms of cost function and distance function | Macquarie University ResearchOnline

Home

List Of Titles

A Duality theorem for the forms of cost function and distance function

Please use this identifier to cite or link to this item: http://hdl.handle.net/1959.14/171859

33 Visitors

38 Hits

0 Downloads

Title: A Duality theorem for the forms of cost function and distance function
Related: Macquarie economics research papers, Vol. 97, No. 3, (1997), p.1-30
Related: http://www.businessandeconomics.mq.edu.au/our_departments/Economics/econ_research/research_papers
Publisher: Department of Economics, Macquarie University
Date: 1997
Author/Creator: Nahm, Daehoon
Description: This paper introduces a duality theorem that is useful in identifying the dual functional form to an arbitrary cost or distance function. It is shown that the distance function dual to an arbitrary cost function is the reciprocal of the cost function with its price arguments replaced by subfunctions of quantities and utility (or output) level. Similarly, the cost function dual to an arbitrary distance function is shown to be the reciprocal of the distance function with its quantity arguments replaced by subfunctions of prices and utility (or output) level. Due to duality, it is not usually necessary to identify a dual functional form implicit in a specified model. However, in certain cases one may need to identify the dual functional form. An example would be the case where Malmquist quantity indices are to be computed while the preference ordering is represented by a nonhomothetic cost function. The theorem is applied to a few popular models for illustration.
Description: 30 page(s)
Subject Keyword: duality
Subject Keyword: cost function
Subject Keyword: distance function
Resource Type: journal article
Organisation: Macquarie University. Dept. of Economics

Identifier: http://hdl.handle.net/1959.14/171859
Identifier: ISBN:1864082860
Identifier: mq-rm-2006002956
Language: eng

Macquarie University ResearchOnline

Search

Browse

Highlights

Resources