2010
DOI: 10.1007/s11123-010-0191-1
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Big and beautiful? On non-parametrically measuring scale economies in non-convex technologies

Abstract: Knowledge on the scale economies drives the incentives of regulators, governments and individual utilities to scale-up or scale-down the scale of operations. This paper considers the returns to scale (RTS) in non-convex frontier models. In particular, we evaluate RTS assumptions in a Free Disposal Hull model, which accounts for uncertainty and heterogeneity in the sample. Additionally, we provide a three-step framework to empirically analyze the existence and extent of RTS in real world applications. In a firs… Show more

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Cited by 34 publications
(5 citation statements)
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References 31 publications
(38 reference statements)
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“…From the point of view of inputs, the ones most used in different works are included in the IWA's category of indicators of maintenance management operations or quality of service. They are staff cost, operational expenditures, energy, and length of mains [72,73].…”
Section: Inputs and Outputs Used To Analyze The Efficiency Of The Water Supply Managementmentioning
confidence: 99%
“…From the point of view of inputs, the ones most used in different works are included in the IWA's category of indicators of maintenance management operations or quality of service. They are staff cost, operational expenditures, energy, and length of mains [72,73].…”
Section: Inputs and Outputs Used To Analyze The Efficiency Of The Water Supply Managementmentioning
confidence: 99%
“…The hospital deriving from the "merger" would have lower storage cost than the two hospitals considered separately, with yet the same stock out risk [17,18]. d) Economies of product multiple [19][20][21][22] Any industrial productive process consists of an endless series of physical and chemical transformations, in which the input (except for the first one) is partly or entirely determined by the output of the previous phase.…”
Section: Origins Of Economies Of Scalementioning
confidence: 99%
“…Its non-convex generalization, the free disposal hull (FDH) model, could be more adequate (De Witte and Marques, 2008) and used to test for the convexity assumption, shedding some light on the RTS characterization issue.…”
Section: The Datamentioning
confidence: 99%
“…(1). This binary constraint ensures that the efficiency score is only affected by observed production units, in contrast to a convex combination of quantities in DEA (De Witte and Marques, 2008).…”
Section: The Datamentioning
confidence: 99%