A cost function for the natural gas transmission industry: further considerations
This article studies the cost function for the natural gas transmission industry. In addition to a tribute to H.B. Chenery, it firstly offers some further comments on a recent contribution (Yépez, 2008): a statistical characterization of long-run scale economies, and a simple reformulation of the long-run problem. An extension is then proposed to analyze how the presence of seasonally-varying flows modifies the optimal design of a transmission infrastructure. Lastly, the case of a firm that anticipates a possible random rise in its future output is also studied to discuss the optimal degree of excess capacity to be built into a new transmission infrastructure.
|Date of creation:||2011|
|Contact details of provider:|| Postal: Department of Economics, Social Sciences Building, City University London, Whiskin Street, London, EC1R 0JD, United Kingdom,|
Phone: +44 (0)20 7040 8500
Web page: http://www.city.ac.uk
More information through EDIRC
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.:
- Kabirian, Alireza & Hemmati, Mohammad Reza, 2007. "A strategic planning model for natural gas transmission networks," Energy Policy, Elsevier, vol. 35(11), pages 5656-5670, November.
- James M. Griffin, 1977. "Long-Run Production Modeling with Pseudo Data: Electric Power Generation," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 112-127, Spring.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, July.
- Griffin, James M, 1978. "Joint Production Technology: The Case of Petrochemicals," Econometrica, Econometric Society, vol. 46(2), pages 379-396, March.
- Andre, Jean & Bonnans, Frédéric & Cornibert, Laurent, 2009. "Optimization of capacity expansion planning for gas transportation networks," European Journal of Operational Research, Elsevier, vol. 197(3), pages 1019-1027, September.
- James M. Griffin, 1979. "Statistical Cost Analysis Revisited," The Quarterly Journal of Economics, Oxford University Press, vol. 93(1), pages 107-129.
- Axel Pierru, 2007. "Short-run and long-run marginal costs of joint products in linear programming," Recherches économiques de Louvain, De Boeck Université, vol. 73(2), pages 153-171.
- Callen, Jeffrey L, 1978. "Production, Efficiency, and Welfare in the Natural Gas Transmission Industry," American Economic Review, American Economic Association, vol. 68(3), pages 311-323, June.
- Axel PIERRU, 2007. "Short-run and long-run marginal costs of joint products in linear programming," Discussion Papers (REL - Recherches Economiques de Louvain) 2007022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Daniel De Wolf & Yves Smeers, 2000. "The Gas Transmission Problem Solved by an Extension of the Simplex Algorithm," Management Science, INFORMS, vol. 46(11), pages 1454-1465, November.