Aggregation of Scale Elasticities Across Firms

Rolf Fare and Valentin Zelenyuk

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we propose new aggregate or ‘group’ primal and dual scale elasticity measures of an economic system (e.g., industry consisting of several firms, etc.). The main contribution of the paper is that we show under what assumptions a formal relationship between these new aggregate scale elasticity measures and the individual scale elasticities can be established. The derivations are based on the principles of economic optimization, and in particular on the duality theory of Shephard (1953) and the aggregation theory of Koopmans (1957).

Keywords: Scale Elasticity; Aggregation; Duality (search for similar items in EconPapers)
JEL-codes: D24 (search for similar items in EconPapers)
Date: 2004-04-15, Revised 2010-01-11
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Citations: View citations in EconPapers (4)

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