Abstract:
:This paper estimates a multiproduct variable cost function using data on a sample of California hospitals. The results provide useful insights into the advantages and disadvantages of flexible functional forms for cost analysis. The translog function appears to provide reasonable estimates of marginal costs when evaluated at or near the approximation point of the function. The estimated function performs less satisfactorily, however, when evaluated outside this range. The paper's results do not provide strong evidence of either ray scale economies or of weak cost complementarities. There is some evidence, however, that the degree of scale economies may be underestimated.
journal_name
J Health Econjournal_title
Journal of health economicsauthors
Vita MGdoi
10.1016/0167-6296(90)90038-5subject
Has Abstractpub_date
1990-06-01 00:00:00pages
1-21issue
1eissn
0167-6296issn
1879-1646pii
0167-6296(90)90038-5journal_volume
9pub_type
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