Exploring hospital production relationships with flexible functional forms.

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 Econ

authors

Vita MG

doi

10.1016/0167-6296(90)90038-5

subject

Has Abstract

pub_date

1990-06-01 00:00:00

pages

1-21

issue

1

eissn

0167-6296

issn

1879-1646

pii

0167-6296(90)90038-5

journal_volume

9

pub_type

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