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

Book Title: NA
Year Published: 2004
Month Published: MAR
Author: Piacenza, M ; Vannoni, D
Book Group Author: NA
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. (C) 2004 Elsevier B.V. All rights reserved.

Pages: 415-422
URL: NA
Volume: 82
Number: 3
Journal: ECONOMICS LETTERS
Journal ISO: Econ. Lett.
Organization: NA
Publisher: ELSEVIER SCIENCE SA
ISBN: NA
ISSN: 0165-1765
DOI: 10.1016/j.econlet.2003.09.020
Keywords:

composite cost function; multi-utilities; scope and scale economies

Source: Web of Science
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