A Micro-Econometric Model of Capital Utilization and Retirement: The Case of the U.S. Cement Industry

Sanghamitra Das

The Review of Economic Studies, 1992, vol. 59, issue 2, 277-297

Abstract: The paper presents a micro-econometric model of capital utilization and retirement. Estimates of a firm's discrete decision problem with regard to an existing piece of capital—whether to operate, hold idle or retire it—are obtained, in the context of the U.S. cement industry, by solving a discrete-choice stochastic dynamic programming model. The estimates are then used to simulate the effects of product and input price changes, and changes in the size and age of a cement kiln on a firm's propensity to operate, hold idle and retire a kiln.

Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:oup:restud:v:59:y:1992:i:2:p:277-297.

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