Advanced Search
MyIDEAS: Login

Vérification des conditions d'efficacité dans la production chez Bell Canada
[Checking the conditions of efficient production in Bell Canada]

Contents:

Author Info

  • Mirucki, Jean

Abstract

The Averch-Johnson hypothesis of over-capitalisation is tested, in this work, using Bell Canada data from the 1952-76 period. The cost minimization conditions are checked by using a Cobb-Douglas production function, with an optional index of technology, while the 1952-76 data sample has been segmented into 8 sub-periods, to check for the influence of the random nature of any given sample. The main results of this paper are, first of all, that the Cobb-Douglas production function provides, overall, a satisfactory description of the production decisions of the firm, showing constant returns to scale in 83 % of the case. Secondly, 11 out of the 13 Student-t tests reject the hypothesis that the firm was minimizing its costs. In all cases, the results indicate that the bias favored the production factor (K). Finally, the most dramatic variations in the results come from the use of segmented periods. The Averch-Johnson hypothesis of over-capitalisation is tested, in this paper, using Bell Canada data from the 1952-76 period. The cost minimization conditions are checked by using a Cobb-Douglas production function, with an optional index of technology, while the 1952-76 data sample has been segmented into 8 sub-periods, to check for the influence of the random nature of any given sample. The main results of this paper are, first of all, that the Cobb-Douglas production function provides, overall, a satisfactory description of the production decisions of the firm, showing constant returns to scale in 83 % of the case. Secondly, 11 out of the 13 Student-t tests reject the hypothesis that the firm was minimizing its costs. In all cases, the results indicate that the bias favored the production factor (K). Finally, the most dramatic variations in the results come from the use of segmented periods.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mpra.ub.uni-muenchen.de/30147/
File Function: original version
Download Restriction: no

Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30147.

as in new window
Length:
Date of creation: Apr 1980
Date of revision: Jun 1980
Handle: RePEc:pra:mprapa:30147

Contact details of provider:
Postal: Schackstr. 4, D-80539 Munich, Germany
Phone: +49-(0)89-2180-2219
Fax: +49-(0)89-2180-3900
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC

Related research

Keywords: averch-johnson effect; overcapitalisation;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. George Stigler, 1958. "The Goals of Economic Policy," The Journal of Business, University of Chicago Press, vol. 31, pages 169.
  2. Peltzman, Sam, 1971. "Pricing in Public and Private Enterprises: Electric Utilities in the United States," Journal of Law and Economics, University of Chicago Press, vol. 14(1), pages 109-47, April.
  3. Migue, Jean-Luc, 1977. "Controls versus Subsidies in the Economic Theory of Regulation," Journal of Law and Economics, University of Chicago Press, vol. 20(1), pages 213-21, April.
  4. Perrakis, Stylianos & Sahin, Izzet, 1972. "Resource Allocation and Scale of Operations in a Monopoly Firm: A Dynamic Analysis," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(2), pages 399-407, June.
  5. P. Joskow, 1974. "Inflation and Environmental Concern: Structural Change in the Process of Public Utility Price Regulation," Working papers 128, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Posner, Richard A, 1975. "The Social Costs of Monopoly and Regulation," Journal of Political Economy, University of Chicago Press, vol. 83(4), pages 807-27, August.
  7. Sheshinski, Eytan, 1976. "Price, Quality and Quantity Regulation in Monopoly Situations," Economica, London School of Economics and Political Science, vol. 43(17), pages 127-37, May.
  8. Perrakis, Stylianos, 1976. "On the Regulated Price-Setting Monopoly Firm with a Random Demand Curve," American Economic Review, American Economic Association, vol. 66(3), pages 410-16, June.
  9. Bailey, Elizabeth E, 1972. "Peak-Load Pricing Under Regulatory Constraint," Journal of Political Economy, University of Chicago Press, vol. 80(4), pages 662-79, July-Aug..
  10. Mann, Patrick C, 1974. "User Power and Electricity Rates," Journal of Law and Economics, University of Chicago Press, vol. 17(2), pages 433-43, October.
  11. Cross, John G, 1970. "Incentive Pricing and Utility Regulation," The Quarterly Journal of Economics, MIT Press, vol. 84(2), pages 236-53, May.
  12. Elton, Edwin J & Gruber, Martin J, 1977. "Optimal Investment and Financing Patterns for a Firm Subject to Regulation with a Lag," Journal of Finance, American Finance Association, vol. 32(5), pages 1485-1500, December.
  13. Kennedy, Thomas E, 1977. "The Regulated Firm with a Fixed Proportion Production Function," American Economic Review, American Economic Association, vol. 67(5), pages 968-71, December.
  14. Boiteux, M., 1971. "On the management of public monopolies subject to budgetary constraints," Journal of Economic Theory, Elsevier, vol. 3(3), pages 219-240, September.
  15. Takayama, Akira, 1969. "Behavior of the Firm under Regulatory Constraint," American Economic Review, American Economic Association, vol. 59(3), pages 255-60, June.
  16. Sheshinski, Eytan, 1971. "Welfare Aspects of a Regulatory Constraint: Note," American Economic Review, American Economic Association, vol. 61(1), pages 175-78, March.
  17. Nguyen, D T & Macgregor-Reid, G J, 1977. "Interdependent Demands, Regulatory Constraint and Peak Load Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 25(4), pages 275-93, June.
  18. Noll, Roger G., . "Empirical Studies of Utility Regulation," Working Papers 135, California Institute of Technology, Division of the Humanities and Social Sciences.
  19. Zajac, E. E., 1972. "Lagrange multiplier values at constrained optima," Journal of Economic Theory, Elsevier, vol. 4(2), pages 125-131, April.
  20. Perrakis, Stylianos, 1976. "Rate of Return Regulation of a Monopoly Firm with Random Demand," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 17(1), pages 149-62, February.
  21. Furubotn, Eirik G & Pejovich, Svetozar, 1972. "Property Rights and Economic Theory: A Survey of Recent Literature," Journal of Economic Literature, American Economic Association, vol. 10(4), pages 1137-62, December.
  22. Victor Chernozhukov & Pierre-André Chiappori & Marc Henry, 2010. "Introduction," Economic Theory, Springer, vol. 42(2), pages 271-273, February.
  23. Waverman, Leonard, 1975. "Peak-Load Pricing under Regulatory Constraint: A Proof of Inefficiency," Journal of Political Economy, University of Chicago Press, vol. 83(3), pages 645-54, June.
  24. Nelson, Boyd L, 1971. "Costs and Benefits of Regulating Communications," American Economic Review, American Economic Association, vol. 61(2), pages 218-25, May.
  25. Demsetz, Harold, 1970. "The Private Production of Public Goods," Journal of Law and Economics, University of Chicago Press, vol. 13(2), pages 293-306, October.
  26. Jordan, William A, 1972. "Producer Protection, Prior Market Structure and the Effects of Government Regulation," Journal of Law and Economics, University of Chicago Press, vol. 15(1), pages 151-76, April.
  27. Meyer, Robert A, 1975. "Monopoly Pricing and Capacity Choice under Uncertainty," American Economic Review, American Economic Association, vol. 65(3), pages 326-37, June.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:30147

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.