On the Use of the-Distance Function for Measuring Welfare in Quantity Constrained Regimes

  • Michael Ahlheim
Conference paper


It is well known that, in principle, there are four alternative possibilities of describing the preference ordering of a consumer by a mathematical function. These alternatives are the direct and the indirect utility function, the expenditure function, and the so-called distance function. While the two utility functions and the expenditure function have become very popular in modern microeconomics, this does not at all hold for the distance function.


Utility Function Distance Function Demand Function Private Good Welfare Measure 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Ahlheim M. (1990), On the use of the distance function for measuring welfare in regimes with quantity constraints and public goods, Diskussionsschriften der Wirtschaftswissenschaftlichen Fakultät der Universität Heidelberg, Nr. 157.Google Scholar
  2. Ahlheim M. (1993), Zur Theorie rationierter Haushalte, Ein Beitrag über die Berücksichtigung limitierter staatlicher Subventionsprogramme in der Haushaltstheorie, Studies in Contemporary Economics, Heidelberg.Google Scholar
  3. Ahlheim, M./Rose, M. (1989), Messung individueller Wohlfahrt, Berlin u. a.O.CrossRefGoogle Scholar
  4. Ahlheim, M./Wagenhals, G (1988), Exakte Wohlfahrtsmaße in der Nutzen-Kosten-Analyse, Zeitschrift für Wirtschafts- und Sozialwissenschaften 108, 169–193.Google Scholar
  5. Anderson, R.W. (1980), Some theory of inverse demand for applied demand analysis, European Economic Review 14, 281–290.CrossRefGoogle Scholar
  6. Blackorby, Ch./Primont, D./Russell, R.R. (1978), Duality, separability, and functional structure: Theory and economic applications, New York.Google Scholar
  7. Deaton, A. (1979), The distance function in consumer behaviour with applications to index numbers and optimal taxation, Review of Economic Studies 46, 391–405.CrossRefGoogle Scholar
  8. Deaton, A. (1980), The measurement of welfare: Theory and practical guidelines, LSMS Working Paper No. 7 ( World Bank Development Research Center ), Washington.Google Scholar
  9. Deaton, A. (1981), Theoretical and empirical approaches to consumer demand under rationing, in: Deaton, A. (ed.) (1981), Essays in the theory and measurement of consumer behaviour, Cambridge, 55–72.Google Scholar
  10. Deaton, A./Muellbauer, J. (1980), Economics and consumer behavior, Cambridge.Google Scholar
  11. De Borger, B. (1989), Estimating the welfare implications of in-kind government programs, A general numerical approach, Journal of Public Economics 38, 215–226.Google Scholar
  12. Debreu, G. (1951), The coefficient of resource utilization, Econometrica 19, 273–292.CrossRefGoogle Scholar
  13. Diewert, W.E. (1974), Applications of duality theory, in: Intriligator, M.D./Kendrick, DA (eds.) ( 1974 ), Frontiers of quantitative economics, vol. n, Amterdam, 107–171.Google Scholar
  14. Diewert, W.E. (1982), Duality approaches to microeconomic theory, in: Arrow, K.J./Intriligator, M.D. (eds.), Handbook of mathematical economics, vol. n, Amsterdam, 535–599.Google Scholar
  15. Diewert, W.E. (1983), The theory of the cost-of-living index and the measurement of welfare, in: W.E. Diewert/C. Montmarquette (eds.), Price level measurement, Ottawa., 163–233.Google Scholar
  16. Ebert, U. (1987), Beiträge zur Wohlfahrtsökonomie, Effizienz und Verteilung, Berlin u. a.O..CrossRefGoogle Scholar
  17. Fuss, M./McFadden, D./Mundlak, Y. (1978), A Survey of functional forms in the economic analysis of production, in: Fuss, M./McFadden, D. (eds.), Production economics: A dual approach to theory and applications, vol. 1, Amsterdam u. a.O.., 219–268.Google Scholar
  18. Hanoch, G. (1978), Symmetric duality and polar production functions, in: Fuss, M./McFadden, D. (eds.), Production economics: A dual approach to theory and applications, vol. 1, Amsterdam u. a.O., 111–131.Google Scholar
  19. Hausmann, J. A. (1981), Exact consumer’s surplus and deadweight loss, American Economic Review 71, 662–676.Google Scholar
  20. Hicks, J.R. (1943), The four consumer’s surpluses, Review of Economic Studies 11, 31–41.CrossRefGoogle Scholar
  21. Johansson, P.-O. (1987), The economic theory and measurement of environmental benefits, Cambridge.Google Scholar
  22. McFadden, D. (1978), Cost, revenue, and profit functions, in: Fuss, M./McFadden, D. (eds.), Production economics: A dual approach to theory and applications, vol. 1, Amsterdam u. a.O., 3–109.Google Scholar
  23. McKenzie, G.W./Ulph, D. (1986), Exact welfare measures, in: Economic Perspectives 4.Google Scholar
  24. Neary, J.P./Roberts, K.W.S. (1980), The theory of household behaviour under rationing, European Economic Review 13, 25–42.CrossRefGoogle Scholar
  25. Pudney, S. (1989), Modelling individual choice: The econometrics of corners, kinks and holes, Oxford.Google Scholar
  26. Rothbarth, E. (1940-41), The measurement of changes in real income under conditions of rationing, Review of Economic Studies 8, 100–107.Google Scholar
  27. Schwab, R.M. (1985), The benefits of in-kind government programs, Journal of Public Economics 27, 195–210.CrossRefGoogle Scholar
  28. Shephard, R.W. (1953), Cost and production functions, Princeton, reprinted in: Lecture Notes in Economics and Mathematical Systems, No. 194, Berlin 1981.Google Scholar
  29. Shephard, R.W. (1970), The theory of cost and production functions, Princeton.Google Scholar
  30. Tobin, J./Houthakker, H.S. (1950–51), The effects of rationing on demand elasticities, Review of Economic Studies 18, 140–153.Google Scholar
  31. Vartia, Y.O. (1983), Efficient methods of measuring welfare change and compensated income in terms of ordinary demand functions, Econometrica 51, 79–98.CrossRefGoogle Scholar

Copyright information

© Springer-Verlag Berlin · Heidelberg 1994

Authors and Affiliations

  • Michael Ahlheim
    • 1
  1. 1.Alfred Weber-Institut für Sozial- und StaatswissenschaftenUniversität HeidelbergHeidelbergGermany

Personalised recommendations