On the Measurement of Capacity Utilization

Randy Nelson

Journal of Industrial Economics, 1989, vol. 37, issue 3, 273-86

Abstract: Capacity utilization is usually defined as the ratio of actual output to the output corresponding to (1) the minimum point on the short-run average total cost curve, and (2) the point of tangency between the long-run average total cost and short-run average total cost curves. In practice, however, capacity utilization is often measured as the ratio of actual to the maximum potential output consistent with a given capital stock. This paper demonstrates how to estimate the theoretical measures of capacity utilization, and examines the correlation between three measures of capacity utilization, and the McGraw-Hill estimates of capacity utilization, using data from a sample of U.S. privately-owned electric utilities for 1961-83. Copyright 1989 by Blackwell Publishing Ltd.

Date: 1989
References: Add references at CitEc
Citations: View citations in EconPapers (66)

Downloads: (external link)
http://links.jstor.org/sici?sici=0022-1821%2819890 ... 0.CO%3B2-N&origin=bc full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See http://www.jstor.org for details.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jindec:v:37:y:1989:i:3:p:273-86

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0022-1821

Access Statistics for this article

Journal of Industrial Economics is currently edited by Pierre Regibeau, Yeon-Koo Che, Kenneth Corts, Thomas Hubbard, Patrick Legros and Frank Verboven

More articles in Journal of Industrial Economics from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().