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Nonparametric and Parametric Measures of Scale Elasticity: A Comparative Evaluation

By TONE Kaoru, SAHOO Biresh K. and TSUTSUI Miki


In any competitive set up, policy recommendations based on elasticity parameters have assumed greater significance for the firm\u27s financial viability and success. So there is a need to examine with more prudence the elasticity estimates obtained from various parametric as well nonparametric methods. The main aim of this paper is first to critically examine these methods in order to shed light on what seems to be missing, and then to proceed by developing an empirically demanding ecompassing measure of scale elasticity. All these measures, which are finally applied to a panel data of US electric companies, constitute the empirical premise of this paper.Research supported by Grant-in-Aid for Scientific Research (C) Japan Society for the Promotion of ScienceFirst version: "A Comparative Evaluation of Parametric and Nonparametric Methods to Estimating Degree of Scale Economies" Tone, Kaoru; Sahoo, Biresh K., 2002/7/31

Topics: DEA, Translog cost function, Cost efficiency, Scale elasticity
Publisher: GRIPS Policy Information Center
Year: 2015
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