 Alternative Approach of Measuring Capacity UtilizationBangladesh Development Studies, 1997, vol. 25, issue 3-4, 219-228 Abstract: Capacity utilization (CU) one of the important indicators for measuring economic performance of production units. It is important for investment planning and resource allocation. In the literature, there are a number of CU measures. In particular, the 1980s witnessed several econometric measures1. Although these measures are important contribution in the literature, they have two severe limitations. These measures do not take into account individual input response (arising from the application) to output and separate the random noise1 while measuring capacity utilization. Drawing on the arguments of Klein (1960) and Fare et al (1989), the aim of this paper is to suggest a methodology for measuring capacity utilization of any production unit, which overcome these stringent limitations. The framework develops from observed inputs and output to measure capacity utilization; based on the best practice performance of all firms in the sampl Keywords: Coefficients; Capacity utilization; Economic models; Development studies; Potential output; Production functions; Regression coefficients; Production estimates; Economic policy (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:ris:badest:0385 Access Statistics for this article Bangladesh Development Studies is currently edited by Dr. Binayak Sen More articles in Bangladesh Development Studies from Bangladesh Institute of Development Studies (BIDS) E-17, Agargaon, Sher-E-Bangla Nagar, Dhaka 1207. Contact information at EDIRC. |
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