On the Calculation of Scale Economies from transport Cost Functions

On the Calculation of Scale Economies from transport Cost Functions

A method is presented to decide how to calculate the degree of scale economies from estimated transport cost functions which include aggregate outputs as arguments. It is shown that the cost elasticity of each of these aggregates should be weighted by a factor that depends crucially on the relation between the aggregate and the output vector.

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Economies of Scale in Bus transport: I. Some British Municipal Results

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