Cost and Revenue Constrained Production

The traditional theory of the firm which serves as the underpinnings of what we know as neoclassical production theory has proved to be a useful basic model. This book is concerned with a class of models which build on this basic form by supposing that the decision-maker is constrained by some budgetary or revenue requirement. These models are both interesting in their own right, but are also of fundamental importance in modelling in sectors such as the service or public sectors of economies. This book includes an expanded set of duality results and provides powerful and useful tools for those working with empirical implementations such as parameterizations, application to efficiency and productivity measurement, and shadow pricing. The authors have sought to present a reasonably mathematical treatment of the subject which is self-contained. It is based on lectures given to graduate students and so will be accessible to all those whose research concerns production theory.