Scale Economies, Elasticities of Substitution and Behaviour of the Railway Transport Costs in Spain

Pablo Coto-Millán, Gema Carrera-Gómez, Vicente Inglada, Ramón Núñez-Sánchez, Juan Castanedo, Miguel A. Pesquera and Rubén Sainz
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Pablo Coto-Millán: University of Cantabria
Gema Carrera-Gómez: University of Cantabria
Vicente Inglada: University Carlos III of Madrid
Ramón Núñez-Sánchez: University of Cantabria
Juan Castanedo: University of Cantabria
Miguel A. Pesquera: University of Cantabria
Rubén Sainz: University of Cantabria

Chapter 7 in Essays on Transport Economics, 2007, pp 111-120 from Springer

Abstract: 7.5 Summary and Conclusions In this paper, we have studied the behaviour of state company RENFE costs from 1964 to 1992. Translog function with the restriction of grade-one homogeneity in the factor prices, has been analized and acceptable results have been obtained for the vehicles-km output. The cost function estimated has an good behaviour since it meets the conditions of monotonicity, quasi concavity and grade-one homogeneity in the factor prices. The comparison between elasticities support the results in previous research since it can be observed that the Allen elasticities of substitution with respect to the Morishima elasticities, overestimate both the substituibility and complementariety relationships. The estimations basically find that the industry is characterized by constant returns to scale.

Keywords: Scale Economy; Input Price; Factor Price; Translog Cost Function; Translog Function (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:spr:conchp:978-3-7908-1765-2_8

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DOI: 10.1007/978-3-7908-1765-2_8

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