The paper investigates the cost properties of a sample of Italian utilities providing in combination gas, water and electricity services. The estimates from a multi-product Composite cost function [Rev. Econ. Stat. 74 (1992) 221] are compared with the ones coming from other traditional functional forms such as the Standard Translog (ST), the Generalized Translog (GT), and the Separable Quadratic (SQ). The results show that the composite model provides a better description of data and highlight the presence of global scope and scale economies for the ‘median’ firm of the sample.

Choosing among Alternative Cost Function Specifications: An Application to Italian Multi-utilities

PIACENZA, Massimiliano;VANNONI, Davide
2004

Abstract

The paper investigates the cost properties of a sample of Italian utilities providing in combination gas, water and electricity services. The estimates from a multi-product Composite cost function [Rev. Econ. Stat. 74 (1992) 221] are compared with the ones coming from other traditional functional forms such as the Standard Translog (ST), the Generalized Translog (GT), and the Separable Quadratic (SQ). The results show that the composite model provides a better description of data and highlight the presence of global scope and scale economies for the ‘median’ firm of the sample.
82(3)
415
422
Composite cost function; Multi-utilities; Scope and scale economies
M. PIACENZA; D. VANNONI
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/2318/26600
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