TY - JOUR
T1 - Choosing among alternative cost function specifications
T2 - An application to Italian multi-utilities
AU - Piacenza, Massimiliano
AU - Vannoni, Davide
PY - 2004/3
Y1 - 2004/3
N2 - 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.
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.
KW - Composite cost function
KW - Multi-utilities
KW - Scope and scale economies
UR - http://www.scopus.com/inward/record.url?scp=0842325238&partnerID=8YFLogxK
U2 - 10.1016/j.econlet.2003.09.020
DO - 10.1016/j.econlet.2003.09.020
M3 - Article
SN - 0165-1765
VL - 82
SP - 415
EP - 422
JO - Economics Letters
JF - Economics Letters
IS - 3
ER -