Distance Functions and Generalized Means: Duality and Taxonomy

Walter Briec

Papers from arXiv.org

Abstract: This article demonstrates how a large number of efficiency measures known in the literature in production economics can be interpreted through the notion of utility function, based on the concept of Stone-Geary utility. Several relationships between these utility functions and distance functions, a commonly used tool in production theory, are established. To achieve these objectives, a generalized mean distance function is introduced, inspired by the Atkinson inequality index, itself derived from the notion of the Aczel mean. It measures the maximum sum of netput expansions required to reach an efficient point. Several duality theorems are established, linking the new distance functions to the profit function. For all feasible production vectors, the results include as special cases most of the dual correspondences previously established in the literature. Finally, a large class of measures is identified for which these duality results can be obtained without requiring convexity. A numerical example is provided.

Date: 2021-12, Revised 2026-04
New Economics Papers: this item is included in nep-eff and nep-upt
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