Economies of Scale in the Swiss Hydropower Sector

Abstract

The paper considers the estimation of a translog cost function employing panel data for a sample of 43 Swiss hydropower companies, over the period of 1995-2002. The results of this analysis indicate the existence of economies of scale and density for most output levels. The basic novelty in this paper is the estimation of a cost function for a sample of hydropower companies. In the economic literature no study on the cost structure of the hydropower plants using an econometric approach has been published so far.econometric estimation of costs, economies of scale and density.