Choosing among alternative cost function specifications: An application to Italian multi-utilities

Massimiliano Piacenza; Davide Vannoni

doi:10.1016/j.econlet.2003.09.020

Choosing among alternative cost function specifications: An application to Italian multi-utilities

Massimiliano Piacenza
, Davide Vannoni

Research output: Contribution to journal › Article › peer-review

Abstract

The paper investigates the cost properties of a sample of Italian utilities providing in combination gas, water and electricity services. The estimates from a multi-product Composite cost function [Rev. Econ. Stat. 74 (1992) 221] are compared with the ones coming from other traditional functional forms such as the Standard Translog (ST), the Generalized Translog (GT), and the Separable Quadratic (SQ). The results show that the composite model provides a better description of data and highlight the presence of global scope and scale economies for the 'median' firm of the sample.

Original language	English
Pages (from-to)	415-422
Number of pages	8
Journal	Economics Letters
Volume	82
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2003.09.020
Publication status	Published - Mar 2004
Externally published	Yes

Keywords

Composite cost function
Multi-utilities
Scope and scale economies

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10.1016/j.econlet.2003.09.020

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abstract = "The paper investigates the cost properties of a sample of Italian utilities providing in combination gas, water and electricity services. The estimates from a multi-product Composite cost function [Rev. Econ. Stat. 74 (1992) 221] are compared with the ones coming from other traditional functional forms such as the Standard Translog (ST), the Generalized Translog (GT), and the Separable Quadratic (SQ). The results show that the composite model provides a better description of data and highlight the presence of global scope and scale economies for the 'median' firm of the sample.",

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AB - The paper investigates the cost properties of a sample of Italian utilities providing in combination gas, water and electricity services. The estimates from a multi-product Composite cost function [Rev. Econ. Stat. 74 (1992) 221] are compared with the ones coming from other traditional functional forms such as the Standard Translog (ST), the Generalized Translog (GT), and the Separable Quadratic (SQ). The results show that the composite model provides a better description of data and highlight the presence of global scope and scale economies for the 'median' firm of the sample.

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KW - Scope and scale economies

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ER -

Choosing among alternative cost function specifications: An application to Italian multi-utilities

Abstract

Keywords

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