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On the Equivalence of Two Concepts of Returns to Scale

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  • Giovanni S.F. Bruno

Abstract

We examine the relationship between two widely used concepts of returns to scale at different levels of analysis. We show that while their weak global versions are equivalent, the strict global versions are not so. Versions at a given input vector are never equivalent, which invalidates a result by Ide and Takayama (1987).

Suggested Citation

  • Giovanni S.F. Bruno, 2004. "On the Equivalence of Two Concepts of Returns to Scale," Bulletin of Economic Research, Wiley Blackwell, vol. 56(1), pages 67-80, January.
    • Handle: RePEc:bla:buecrs:v:56:y:2004:i:1:p:67-80
    DOI: 10.1111/j.1467-8586.2004.00189.x
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    References listed on IDEAS

    as
    1. Hanoch, Giora, 1975. "The Elasticity of Scale and the Shape of Average Costs," American Economic Review, American Economic Association, vol. 65(3), pages 492-497, June.
    2. Werner Antweiler & Daniel Trefler, 2002. "Increasing Returns and All That: A View from Trade," American Economic Review, American Economic Association, vol. 92(1), pages 93-119, March.
    3. Ide, Toyonari & Takayama, Akira, 1987. "On the concepts of returns to scale," Economics Letters, Elsevier, vol. 23(4), pages 329-334.
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