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Title
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Static efficiency decompositions and capacity utilization : integrating economic and technical capacity notions
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Author
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Abstract
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| Starting from existing static decompositions of overall economic efficiency on nonparametric production and cost frontiers, this article proposes more comprehensive decompositions including several cost-based notions of capacity utilization. Furthermore, in case prices are lacking, we develop additional decompositions of overall technical efficiency integrating a technical concept of capacity utilization. These new efficiency decompositions provide a link between short and long run economic analysis and, in empirical work, avoid conflating inefficiency and differences in capacity utilization. An empirical analysis using a monthly panel of Chilean hydroelectric power plants illustrates the potential of these decomposition proposals. |
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Language
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English
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Source (journal)
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Applied economics. - Oxford, 1969, currens
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Publication
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Oxford
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2012
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ISSN
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0003-6846
[print]
1466-4283
[online]
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DOI
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10.1080/00036846.2011.587783
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Volume/pages
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44
:31
(2012)
, p. 4125-4141
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ISI
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000301544100009
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Full text (Publisher's DOI)
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