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Nonjointness and Scope Economies in the Multiproduct Symmetric Generalized McFadden Cost Function

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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

Paper provided by Department of Economics, University of Victoria in its series Econometrics Working Papers with number 0709.

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Length: 14 pages
Date of creation: 16 Dec 2007
Date of revision:
Handle: RePEc:vic:vicewp:0709

Note: ISSN 1485-6441
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Keywords: Nonjointness; multiproduct cost function;

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Cited by:
  1. 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.
  2. 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.

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