IDEAS home Printed from https://ideas.repec.org/a/cem/jaecon/v4y2001n1p107-124.html
   My bibliography  Save this article

Maintenance

Author

Listed:
  • Jonathan E. Leightner

    () (Augusta State University)

Abstract

Maintenance and production interact. The ideal way of accounting for this interaction, when estimating production functions, is by picking the temporal length of observations so that they embed integer multiples of the production—maintenance cycles for all inputs. In contrast to labor and land, the production—maintenance cycles of capital sometimes vary tremendously in temporal length, which can make it impossible to implement the ideal method of accounting for the interaction between maintenance and production. This paper empirically tests four second best methods of accounting for maintenance, when the ideal method is impossible. The output elasticities of all inputs (not just the input undergoing maintenance), which emerge from these tests, vary tremendously. This implies that the way that maintenance is incorporated into the analysis (including the standard approach of ignoring maintenance) drastically affects the profit maximizing combinations of inputs derived from production function estimations.

Suggested Citation

  • Jonathan E. Leightner, 2001. "Maintenance," Journal of Applied Economics, Universidad del CEMA, vol. 4, pages 107-124, May.
    • Handle: RePEc:cem:jaecon:v:4:y:2001:n:1:p:107-124
    as

    Download full text from publisher

    File URL: http://www.cema.edu.ar/publicaciones/download/volume4/leightner.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Jorgenson, Dale W, 1996. "Empirical Studies of Depreciation," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 24-42, January.
    2. Jonathan E. Leightner & CA. Knox Lovell, 1998. "Weather and Pollution Abatement Costs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 165-189.
    3. Geoffrey Rothwell & John Rust, 1995. "A Dynamic Programming Model of U.S. Nuclear Power Plant Operations," Microeconomics 9502001, EconWPA, revised 06 Feb 1995.
    4. Leightner, Jonathan E., 1999. "Weather-induced changes in the tradeoff between SO2 and NOx at large power plants," Energy Economics, Elsevier, vol. 21(3), pages 239-259, June.
    5. Triplett, Jack E, 1996. "Depreciation in Production Analysis and in Income and Wealth Accounts: Resolution of an Old Debate," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 93-115, January.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    maintenance; efficiency; electricity; production and cost functions;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cem:jaecon:v:4:y:2001:n:1:p:107-124. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valeria Dowding). General contact details of provider: http://edirc.repec.org/data/cemaaar.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.