ECONOMIES OF SCALE AND COST EFFICIENCIES: A PANEL‐DATA STOCHASTIC‐FRONTIER ANALYSIS OF REAL ESTATE INVESTMENT TRUSTS*

Stephen Miller, Terrence M. Clauretie and Thomas M. Springer

Manchester School, 2006, vol. 74, issue 4, 483-499

Abstract: This paper extends the existing research on real estate investment trust (REIT) operating efficiencies. We estimate a stochastic‐frontier, panel‐data model specifying a translog cost function, covering 1995–2003. The results disagree with previous research in that we find little evidence of scale economies and some evidence of scale diseconomies. Moreover, we also generally find smaller inefficiencies than those shown by other REIT studies. Contrary to previous research, the results also show that self‐management of a REIT associates with more inefficiency when we measure output with assets. When we use revenue to measure output, self‐management associates with more efficiency. Also contrary to previous research, higher leverage associates with more efficiency. The results further suggest that inefficiency increases over time in three of our four specifications.

Date: 2006
References: View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://doi.org/10.1111/j.1467-9957.2006.00505.x

Related works:
Working Paper: Economies of Scale and Cost Efficiencies: A Panel-Data Stochastic-Frontier Analysis of Real Estate Investment Trusts (2005)
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:manchs:v:74:y:2006:i:4:p:483-499

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1463-6786

Access Statistics for this article

Manchester School is currently edited by Keith Blackburn

More articles in Manchester School from University of Manchester Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().