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A Comparative Evaluation of Parametric and Nonparametric Methods to Estimating Degree of Scale Economies

By TONE Kaoru and SAHOO Biresh K.

Abstract

Policy recommendations based on elasticity parameters have assumed greater significance for the firm\u27s financial viability and success in a competitive set up. 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, then to point out their limitations, and finally to propose an alternative method to be considered for while pursuing further elasticity studies.Research supported by Grant-in-Aid for Scientific Research (C) Japan Society for the Promotion of ScienceRevised version: "Nonparametric and Parametric Measures of Scale Elasticity: A Comparative Evaluation" Tone, Kaoru; Sahoo, Biresh K.; Tsutsui, Miki, I-2002-0004 Rev. 2005/1/17http://www.grips.ac.jp/list/facultyinfo/tone_kaoru

Topics: cost efficiency, production elasticity, cost elasticity, returns to scale
Publisher: GRIPS Policy Information Center
Year: 2015
OAI identifier: oai:grips.repo.nii.ac.jp:00001161

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