RATE OF RETURN REGULATION AND THE REGULATED FIRM'S CHOICE OF CAPITAL-LABOR RATIO: FURTHER EMPIRICAL EVIDENCE ON THE AVERCH-JOHNSON MODEL.
The purpose of this paper is to present an alternative test of the Averch-Johnson model employing the implicit demand function for the firm's choice of capital and labor production.[1] This procedure permits one to analyze several comparative static properties of the A-J model. In addition to a test...
| Publicado en: | Southern Economic Journal Vol. 42; no. 3; pp. 384 - 399 |
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| Autores principales: | , |
| Formato: | Artículo |
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Wiley-Blackwell
Jan76
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=hlh&AN=4627271&site=ehost-live header: @attributes: shortDbName: hlh uiTerm: 4627271 longDbName: Humanities International Complete uiTag: AN controlInfo: bkinfo: jinfo: jid: 00384038 SEJ jtl: Southern Economic Journal issn: 00384038 maglogo: N pubinfo: dt: Jan76 vid: 42 iid: 3 pid: 480 pub: Wiley-Blackwell artinfo: ui: 4627271 10.2307/1056617 ppf: 384 ppct: 15 formats: tig: atl: RATE OF RETURN REGULATION AND THE REGULATED FIRM'S CHOICE OF CAPITAL-LABOR RATIO: FURTHER EMPIRICAL EVIDENCE ON THE AVERCH-JOHNSON MODEL. aug: au: Hayashi, Paul M. Trapani, John M. su: Labor productivity Rate of return Demand function sug: subj: Labor productivity Rate of return Demand function ab: The purpose of this paper is to present an alternative test of the Averch-Johnson model employing the implicit demand function for the firm's choice of capital and labor production.[1] This procedure permits one to analyze several comparative static properties of the A-J model. In addition to a test of the Averch-Johnson effect, estimation of the derived demand function provides direct tests of the related proportions that the regulated monopolist's capital-labor ratio will increase if the allowed rate of return is decreased (regulation is tightened), and that rising costs of non-base inputs will cause the firm to produce more efficiently. <BR> The purpose of this paper is to present a method and the results of testing several of the comparative static properties of the Averch-Johnson model. The procedure employed is to derive the determinants of the regulated monopolists' capital-labor ratio and to establish their sign restrictions from the comparative static properties of the model. This method permits one to test several propositions associated with rate of return regulation: a) if the firm produces with a capital-labor ratio greater than the cost minimizing one (Averch-Johnson effect); b) if tightening regulation increases the distortion in the firm's choice of productive inputs; and c) if rising costs of non-base inputs causes the firm to produce more efficiently. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: Y dt: @attributes: year: 1976 holdings: @attributes: islocal: N |
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