Was the bell system a natural monopoly? An application of data envelopment analysis

Hsihui Chang () and Raj Mashruwala ()

Annals of Operations Research, 2006, vol. 145, issue 1, 263 pages

Abstract: Examination of the relation between scale economies and natural monopoly has been a central issue in public policy research. The paper employs Data Envelopment Analysis (DEA) methodology to re-examine the issue of natural monopoly for the Bell system with annual time series data for 1947--1977. Results from the DEA-based statistical tests reveal the prevalence of increasing returns to scale for the Bell system, implying that there were economies of scale for the Bell system. This evidence suggests that the Bell data was indeed consistent with a natural monopoly. Further, the results indicate that the low level of overall efficiency primarily results from allocative inefficiency rather than technical and scale inefficiency. Copyright Springer Science+Business Media, LLC 2006

Keywords: DEA; Bell system; Returns to scale; Inefficiency (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1007/s10479-006-0033-8 (text/html)
Access to full text is restricted to subscribers.

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:spr:annopr:v:145:y:2006:i:1:p:251-263:10.1007/s10479-006-0033-8

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-006-0033-8

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().