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Econometric estimation of scale and scope economies within the port sector: a review


  • Tovar, B.
  • Jara-Diaz, S.
  • Trujillo, L.


Seaports provide multiple services to ships, cargo and passengers. The size of the port and type of service they offer are two key elements when deciding whether competition is feasible and how to promote it or, conversely, regulation is needed. Analysing this requires a profound knowledge of the cost structure of the activity involved. This means not only knowing total costs for different volumes of aggregated traffic, but also the behaviour of costs when part of the bundle is produced, i.e. when the mix changes. The optimal organization of the industry can be studied by means of cost and production functions. This paper offers a review of the relatively scarce literature about econometric ports’ cost structure, and highlights the role of the multioutput approach as the correct one because it allows the calculation of key cost indicators (economies of scale, scope and so forth) to determine the optimal port industrial structure for a given forecast of demand (traffic mix and volume).
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  • Tovar, B. & Jara-Diaz, S. & Trujillo, L., 2007. "Econometric estimation of scale and scope economies within the port sector: a review," Working Papers 07/04, Department of Economics, City University London.
  • Handle: RePEc:cty:dpaper:07/04

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    Cited by:

    1. Mehdi Farsi & Aurelio Fetz & Massimo Filippini, 2007. "Economies of Scale and Scope in the Swiss Multi-Utilities Sector," CEPE Working paper series 07-59, CEPE Center for Energy Policy and Economics, ETH Zurich.
    2. Tovar, Beatriz & Wall, Alan, 2014. "The impact of demand uncertainty on port infrastructure costs: Useful information for regulators?," Transport Policy, Elsevier, vol. 33(C), pages 176-183.
    3. Fetz, Aurelio & Filippini, Massimo, 2010. "Economies of vertical integration in the Swiss electricity sector," Energy Economics, Elsevier, vol. 32(6), pages 1325-1330, November.

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