Abstract: This paper develop a utility Malmquistproductivityindex basedon distance function.The index,which is defined in terms of maximizing expected utility rather than output,is decomposed into:technical efficiency change,technical change,allocative efficiency change and outside system effect.This method is suitable for oligopolistic industry or public goods sectors whose decision needs to integrate economic and social factors.Finally,the paper gives an empirical analysis by evaluating the listed coal electricity corporations from 2006 to 2007.The results indicates that the utility approach fits more close to the practice than the input approach,and can give more reasonable economic explanation.

Key words: Malmquist index, utility function, coal power industry