Nonjointness and Scope Economies in the Multiproduct Symmetric Generalized McFadden Cost Function
AbstractThe 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 InfoPaper provided by Department of Economics, University of Victoria in its series Econometrics Working Papers with number 0709.
Length: 14 pages
Date of creation: 16 Dec 2007
Date of revision:
Note: ISSN 1485-6441
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Nonjointness; multiproduct cost function;
Other versions of this item:
- Kenneth Stewart, 2009. "Non-jointness and scope economies in the multiproduct symmetric generalized McFadden cost function," Journal of Productivity Analysis, Springer, Springer, vol. 32(3), pages 161-171, December.
- C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-01-05 (All new papers)
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