Abstract
This chapter introduces several elements useful for applied economists by implementing the theory of producer behavior. The first section reviews traditional production theory as well as concepts developed under the duality theory as applied to analysis of producer behavior. In the second section we present the translog functional form, which is used in chapters 8 and 9 to estimate the long- and short-run cost functions for the Swiss electric distribution utilities. The third section presents possible ways to account for heterogeneity of output and technological environment of the firm in a cost model. Finally, a survey of the most important econometric analysis of electricity cost functions is discussed in the last section of this chapter.
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References
For a graphical presentation of property 6, see Chambers (1988).
For a good overview of functional form in applied production analysis see Chambers (1988) and Griffin et aI. (1987).
See for example Nordin (1947), Johnston (1952) and Huettner and Landon (1974).
See Fuss, McFadden and Mundlak (1978)
See Greene (1993) for the econometric problems of the Box-Cox transformation and Caves et. al. (1981) for an application of this approach.
See Panzar and Willig (1977).
See Oum and Thretheway (1989) for an interesting discussion of the heterogeneity of outputs and cost function specifications.
For an application of this approach in estimating cost functions see for example Mundlak (1978), Caves, Christensen and Tretheway (1984b), Callan (1991), Good et al. (1992) and Friedlander et al. (1993).
For a extensive review of previous studies see Cowing and Smith (1978).
See Christensen and Greene (1976), Gollop and Roberts (1983), Nelson (1989), Callan (1991), Thompson and Wolf (1993) and Kamerschen and Thompson (1993) for examples of studies in electricity generation; See Weiss (1975), Henderson (1985), Roberts (1986), Nelson and Primeaux (1988) and Salvanes and Tj4ota (1994) for empirical evidence for transmission and distribution of electricity.
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© 1997 Physica-Verlag Heidelberg
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Filippini, M. (1997). Implementing Producer Theory. In: Elements of the Swiss Market for Electricity. Contributions to Economics. Physica-Verlag HD. https://doi.org/10.1007/978-3-642-47000-4_7
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DOI: https://doi.org/10.1007/978-3-642-47000-4_7
Publisher Name: Physica-Verlag HD
Print ISBN: 978-3-7908-0996-1
Online ISBN: 978-3-642-47000-4
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