Abstract - Using
a panel of local public transport companies, four different cost
specifications are compared. The standard translog and the generalized
translog specifications give unreliable estimates with respect to
scope economies because of the degenerate behaviour of such functions
when outputs are set to zero. The separable quadratic and the
composite models allow the direct handling of zero outputs and they
better fit the data. Moderate global scope economies are estimated
from the preferred specification (0.2%), but splitting global scope
economies into its two components, it is found that large fixed cost
savings can be obtained from joint production (6.3%). Density
economies and modest scale economies are also detected for the median
firm in the sample. |