A data envelopment analysis of gas utilities' efficiency

This study examines the Natural Gas Policy Act of 1978 and Federal Energy Regulatory Commission (FERC) policies that culminated in Order 636 in 1992. The regulatory environment in which natural gas distribution utilities operate was altered. FERC policies forced local gas distribution utilities into an increasingly competitive environment. Restructuring of the industry may affect economic efficiency. Data Envelopment Analysis is used to examine the economic efficiency of gas distributors during 1975–94. Federal policy appears to lead to a reduction in scale due to restructuring and more competition. Reduced scale economies have not altered the economic efficiency of the utilities.     

SCALE ECONOMIES OF THE FRANCHISED BUSES AND FERRIES OF HONG KONG, 1948–1998

The privatization of state transport operators has been driven by empirical discoveries in transport economic research of the constant or even diseconomies of scale of these operators. With reference to public records and official statistics, this paper is an initial attempt to examine the scale economies of and output relationship between major bus and ferry operators in Hong Kong during the period 1948–1998. The two franchised bus and two franchised ferry companies each experienced unique scale effects during different periods and correlated with each other in terms of production. The paper will also discuss the possible reasons for this phenomenon and policy concerns related to this finding.     

Economies of scale and scope in water supply

This study examines the multiproduct nature of water supply relative to economies of scale and scope. The water utility is viewed as a multiproduct firm providing residential and non- residential services with spatial variation. There are no significant economies of scale in the utility's overall operation. The utility, however, enjoys considerable economies for non- residential water supply but suffers from diseconomies in residential supply. The economies of scale achieved in water treatment are mostly lost in the distribution of water. The utility on the whole experiences economies of scope associated with joint production of the two services. Furthermore, water utilities have no perceptible tendency to behave as a natural monopoly.     

FLEXIBLE COST FUNCTION ESTIMATES FOR A GAS AND FUEL CORPORATION IN AUSTRALIA

This paper reviews and empirically tests the available evidence concerning economies of scale and technological change at Australian Gas Limited of New South Wales (AGL). a gas and fuel corporation. Since energy corporations are considered to need scale economies, they are regulated 'n both developed and developing countries. In keeping with the trend of deregulation stemming from the beginning of the 1980s in Western countries, many kinds of public corporations have been privatized and deregulated. Energy corporations are not an exceptional case, but very little evidence on this industry has been reported so far. From empirical tests, it is shown in a trans-log-type cost function that AGL has scale economies. the degree of which increased after the corporation changed its energy source from coal oil to liquid natural gas. Moreover, from the results of the trans-log cost function including technological change, a Hicksian neutral type technical progress exists. In a Hicksian non-neutral type, stock-intensive technical progress exists. while labor productivity deterioates. Energy productivity is not significant.     

A further note on the structure of gas distribution costs in urban areas

This note re-examines the issue of functional form selection in estimating the relationship between gas distribution costs and market and density variables. The study by [Guldmann, 1983], where only linear and log-linear forms were considered, is expanded by using a general functional form based on the Box-Cox transformation. The maximum-likelihood estimated forms turn out to be different from the log-linear ones previously selected, and their implications for economies of scale and density are discussed.     

A cost function study of the providers of TVA power

This paper examines these TVA power distributor issues: distribution of nonelectric utilities, municipal versus co-operative distributors, effects of high urbanization, marketing and customer recruiting (M&CR), conservation and load management (C&LM) programs, and service area boundary changes. A translog cost model is the basis for the analyses. The conclusions are: (1) TVA distributors experience electrical distribution inefficiencies when they distribute water and electricity, but when they also distribute gas, there are no additional effects; (2) TVA co-operatives enjoy electrical distribution cost advantages over TVA municipals; (3) the TVA municipals that serve the five largest metropolitan areas of the Tennessee River Valley have the highest electrical distribution costs; (4) M&CR efforts benefit TVA distributors; (5) the many TVA-sponsored C&LM programs produce varied fiscal effects for TVA distributors; (6) there are both diseconomies and economies to scale given proportional increases in output components brought about by hypothetical increases in TVA distributor service areas.     

Economies of scale in advertising

In this article a flexible quadratic model is used to generate sales elasticity estimates for own advertising, competitor advertising and media concentration. On the basis of these estimates, moderate and declining economies of scale in advertising are indicated for firms at the highest end of the advertising per firm distribution. No advertising economies, however, are obvious for the levels of advertising common across the broad spectrum of US industry. Thus, any competitive harm due to economies of scale in advertising would seem quite minor.     

Efficiency in Third Sector Partnerships for Delivering Local Government Services: The role of economies of scale,scope and learning

Abstract

Third sector partnerships are under pressure to change in the light of the increasing cost pressures on local public services. The literature throws doubt on the level of economies of scale and suggests that more attention should be given to economies of scope and learning. The common conflation of economies of size with economies of scale has led policymakers to overemphasize larger scale providers and has distorted the strategies which third sector organizations have adopted, pushing them towards mergers and consortia based on scale.     

Household Economies of Scale and Changes In the Distribution of Income

A bstract A household's position in the distribution of income depends not only on the household's disposable income but aldo on the degree to which economies of scale in operating a bousehold exist Since the magnitude of these 'scale effects'has never been definitively measured, three sets of assumptions about equivalent household sizes are used to construct three income distributions for 1980 and 1986 Fconomies of scale in operating a household are assumed to be strong, weak, and non existent In given vear, as these scale effects are reduced, the size of the middle segment declines It is also observed that over time, with each set of assumptions, the size of the middle segment declines Moreover, the sizes of the households found in each tail of the distribution are very sensitive to the assumption relating to economies of scale in operating a household     

Returns to scale in the United States intercity bus industry

This paper has taken into account the a priori restrictions available from neoclassical cost theory in evaluating the relationship between cost and the level of output and input prices for U.S. intercity bus service. A general translog cost function is used which allows tests of the degree of returns to scale, homotheticity and non-constant elasticities of substitution among input pairs. Major empirical findings are: (i) the intercity bus service can be modeled by a homothetic production function, (ii) operators can substitute labor for capital by using vehicles more extensively, (iii) there are potential economies of scale in the provision of intercity bus service, and (iv) the Cobb-Douglas functional form used in earlier studies of the industry is inappropriate.     

Product differentiation,monopolistic competition and city size

Traditionally, the formation of cities has been explained by such supply-side phenomena as scale economies in production or such demand-side phenomena as public goods. This paper presents an integrated demand and supply approach to the formation of cities in spatial economy. Demand considerations, in the form of consumer agglomeration economies (i.e., product variety), are presented as a major cause of urban agglomeration. On the supply side, scale economies are introduced. Both aspects are examined by using the Dixit-Stiglitz model of monopolistic competition to characterize the equilibrium and optimum city size. We also discuss a subsidy scheme that produces an equilibrium city size corresponding to a first-best optimum. Then we analyze the distribution of population in a system of two cities.     

Learning by fund-raising

From experience, fund-raisers become more efficient solicitors. This paper offers a full characterization of the optimal solicitation strategy when there are learning economies. The characterization is recursive, and does not require equilibrium computations. Our main results are that (1) the fund-raiser may now solicit a “ net free-rider”—a donor whose contribution falls below the marginal solicitation cost; (2) the number of solicitations is non-monotonic in the learning rate; and (3) a solicitation technology with high overhead but low marginal costs is likely to be optimal if income distribution in the population is relatively homogenous. The complementary case with a decreasing returns to scale technology is also considered.     

Economies of scale and organization efficiency in banking

Previous studies attempting to assess economies of scale in banking firms have largely relied upon cost functions. The profit-function approach enjoys several important advantages over the cost-function method, consequently that is the approach used in this study. A risk-adjusted profit function estimates economies of scale of unit and branch banks; and the effects of bank holding-company affiliation on the level of bank profits is also examined. The results indicate larger economies of scale for branch banks than for unit banks; and bank holding-company affiliates were found to be more efficient than independent banks.     

Nonparametric analysis of returns to scale in the US hospital industry

This paper presents new estimates of scale economies for US hospitals. We show that the common translog specification of hospital costs is a misspecification, and employ nonparametric, local linear estimation with both continuous and discrete covariates. A bootstrap method is used to provide inferences regarding ray scale economies and expansion path scale economies for a large sample of hospitals covering 1984–1996. We find evidence of changes in the structure of hospital costs over the sample period, as well as evidence of locally optimal hospital sizes. Copyright © 2004 John Wiley & Sons, Ltd.     

Public spending and economies of scale in partial fiscal decentralized governments: The case of Chile

This article evaluates economies of scale in local public spending in Chile, emphasizing the country's geographical features and high fiscal heterogeneity. We leverage balanced panel data for ten years and 307 municipalities in order to estimate the population level at which a reduction in the average cost of local public goods provision occurs and to differentiate between levels of market potential. We follow a theoretical model of cost efficiency that considers spatial interactions and spillover effects among neighboring jurisdictions. Our findings suggest that Chilean municipalities reach an optimum population level at around 700,000 inhabitants, which is high considering that only two cities qualify. When differentiating for levels of economies of scale according to levels of market potential, municipalities with a low potential reach their optimum at around 28,000 inhabitants, those with a medium potential reach it at approximately 124,000, and those with a high potential reach it at approximately 680,000.     

The temporal behavior of scale economies within A banking firm

Examining the time path of the scale economies has not received much attention until recently. Moreover, the time path of scale economies for a given firm has not been studied in the banking literature at all. Examining scale economies, either from cross-sectional or panel data, based only on a single estimate ignores the dynamic behavior (both cost- and production-wise) of a banking firm as well as of the banking industry. We study the time-varying scale economies of commercial banking firms. We employ the Kalman-filter approach in estimating the translog cost function. The Kalman filter allows the parameters of the translog cost function and therefore the scale economies to be time dependent and varying. The estimation results indicate significant variation in inter- and within-firm scale economies over time for sample banks.     

Accumulation, Technical Progress, and Increasing Returns in the Economic Growth of East Asia

Adopting homothetic variable returns to scale functional specifications, this study identifies the returns to scale in the aggregate production functions of four East Asian newly industrialized economies–Hong Kong, Korea, Singapore, and Taiwan–and the Group of Five economies based on a maximum likelihood estimation. The study finds evidence of increasing returns in the early developmental stage of the East Asian economies. Separating out the scale contribution from the non-scale factor contributions, the decomposition of the sources of East Asian economic growth differs significantly from the conventional constant returns to scale results, indicating that the role of technical progress is overestimated when constant returns to scale is assumed.     

Economies of scale for a state system of public school districts

A review of the different variables, school district samples, regression techniques and a priori assumptions utilized in recent studies clearly indicates that no standard model or set of procedures have been developed for the problems of economies of scale within the educational sector. Based on these studies and a brief discussion of the limitations of economies of scale models as a tool in policy planning, we present a generalizable model that can easily be applied to statistics now available in state departments of education to derive valuable new information about the existing cost-size relationships and opportunity costs that exist in a state system of public school districts. A recent application of the model in Oregon that illustrates its generalizability is described. An example of how economies of scale information might be used in policy planning and proposed district consolidations is also outlined.     

Economies of diversification in the US credit union sector

Significant scale economies have been recently cited to rationalize a dramatic growth in the US retail credit union sector over the past few decades. In this paper, we explore another plausible supply‐side explanation for the growth of the industry, namely economies of diversification. We focus on the fact that credit unions differ among themselves in the range of financial services they offer to their members. Since larger credit unions tend to offer a more diversified financial service menu than credit unions of a smaller size, the incentive to grow in size may be fueled not only by present scale economies but also by economies of diversification. This paper provides the first robust estimates of such economies of diversification for the credit union sector. We estimate a flexible semiparametric smooth coefficient quantile panel data model with correlated effects that is capable of accommodating a four‐way heterogeneity among credit unions. Our results indicate the presence of non‐negligible economies of diversification in the industry. We find that as many as 27–91% (depending on the type and the cost quantile) of diversified credit unions enjoy substantial economies of diversification; the cost of most remaining credit unions is invariant to the scope of services. We also find overwhelming evidence of increasing returns to scale in the industry.     

浅谈大型连锁超市配送中心规划设计

大型连锁超市的规模经济性质决定了大型连锁超市必须建立配送中心。在规划设计大型连锁超市的过程中必须定位配送中心的服务对象、服务内容、服务流程、设施配置及服务团队的选择和组建,才能规划设计出比较成功的大型连锁超市配送中心。