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Non-jointness and scope economies in the multiproduct symmetric generalized McFadden cost function

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  • Kenneth Stewart

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Abstract

The multiproduct symmetric generalized McFadden cost function is increasingly prominent in empirical production analysis. Researchers should be aware that the scope for imposing and testing nonjointness in this model is limited. In the general version of the model, nonjointness requires the nontestable maintained hypothesis of similar (in a sense we define) single-output production technologies, a maintained hypothesis for which there is not normally any basis. The apparent imposition and testing of nonjointness must be qualified accordingly. In restricted versions of the model involving separability or constant returns that are often of interest in applied work,nonjointness is precluded.

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Bibliographic Info

Article provided by Springer in its journal Journal of Productivity Analysis.

Volume (Year): 32 (2009)
Issue (Month): 3 (December)
Pages: 161-171

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Handle: RePEc:kap:jproda:v:32:y:2009:i:3:p:161-171

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Web page: http://www.springerlink.com/link.asp?id=100296

Related research

Keywords: Non-jointness; Multi-product cost function; Multi-output production; C50; D24;

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References

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  1. Asai, Sumiko, 2006. "Scale economies and scope economies in the Japanese broadcasting market," Information Economics and Policy, Elsevier, vol. 18(3), pages 321-331, September.
  2. Hall, Robert E, 1973. "The Specification of Technology with Several Kinds of Output," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 81(4), pages 878-92, July-Aug..
  3. Kenneth Stewart & J. Jones, 2010. "Are sports teams multiproduct firms?," Empirical Economics, Springer, Springer, vol. 39(2), pages 487-514, October.
  4. Ivaldi, Marc & McCullough, Gerard, 2004. "Subadditivity Tests for Network Separation with an Application to US Railroads," CEPR Discussion Papers 4392, C.E.P.R. Discussion Papers.
  5. Ludo Peeters & Yves Surry, 2000. "Incorporating Price-Induced Innovation in a Symmetric Generalised McFadden Cost Function with Several Outputs," Journal of Productivity Analysis, Springer, Springer, vol. 14(1), pages 53-70, July.
  6. Barnett, William A. & Geweke, John & Wolfe, Michael, 1991. "Seminonparametric Bayesian estimation of the asymptotically ideal production model," Journal of Econometrics, Elsevier, Elsevier, vol. 49(1-2), pages 5-50.
  7. Stewart, Kenneth G & Jones, J C H, 1998. "Hedonics and Demand Analysis: The Implicit Demand for Player Attributes," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 36(2), pages 192-202, April.
  8. Diewert, Walter E & Wales, Terence J, 1987. "Flexible Functional Forms and Global Curvature Conditions," Econometrica, Econometric Society, Econometric Society, vol. 55(1), pages 43-68, January.
  9. Blackorby, Charles & Primont, Daniel & Russell, R. Robert, 1977. "On testing separability restrictions with flexible functional forms," Journal of Econometrics, Elsevier, Elsevier, vol. 5(2), pages 195-209, March.
  10. Diewert, W E & Wales, T J, 1988. "Normalized Quadratic Systems of Consumer Demand Functions," Journal of Business & Economic Statistics, American Statistical Association, American Statistical Association, vol. 6(3), pages 303-12, July.
  11. Jan Larsson, 2003. "Testing the Multiproduct Hypothesis on Norwegian Aluminium Industry Plants," Discussion Papers, Research Department of Statistics Norway 350, Research Department of Statistics Norway.
  12. Donald G. Ferguson & J. C. H. Jones & Kenneth G. Stewart, 2000. "Competition Within A Cartel: League Conduct And Team Conduct In The Market For Baseball Player Services," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 422-430, August.
  13. Diewert, W. E. & Wales, T. J., 1995. "Flexible functional forms and tests of homogeneous separability," Journal of Econometrics, Elsevier, Elsevier, vol. 67(2), pages 259-302, June.
  14. repec:rne:rneart:v:7:y:2008:i:1:p:159-171 is not listed on IDEAS
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Cited by:
  1. Casasnovas, Valero L. & Aldanondo, Ana Maria, 2011. "Influence of Animal Feeding on Milk Supply in Navarre," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland, European Association of Agricultural Economists 114316, European Association of Agricultural Economists.
  2. Bichler, Martin & Schneider, Stefan & Guler, Kemal & Sayal, Mehmet, 2011. "Compact bidding languages and supplier selection for markets with economies of scale and scope," European Journal of Operational Research, Elsevier, Elsevier, vol. 214(1), pages 67-77, October.

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