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Interpreting Dual Variables for Optimization with Nonmonetary Objectives
Author(s) -
Preckel Paul V.,
Featherstone Allen M.,
Baker Timothy G.
Publication year - 1987
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1242197
Subject(s) - shadow price , maximization , dual (grammatical number) , utility maximization , minification , unit (ring theory) , economics , mathematical optimization , computer science , econometrics , resource (disambiguation) , marginal utility , mathematical economics , operations research , microeconomics , mathematics , art , computer network , mathematics education , literature
An approach to the interpretation of dual variables for mathematical programs with nonmonetary objectives is described. The approach is general, and in particular may be applied to problems of goal programming, expected utility maximization, intertemporal utility maximization and risk minimization subject to minimum income constraints. The technique is designed to transform shadow prices, expressed in marginal increases in the objective per unit of resource, into easily interpreted units, such as dollars per unit of resource.