TY  - RPRT
        AU  - Cherchye, Laurens
AU  - Rock, Bram De
AU  - Vermeulen, Frederic
        TI  - Analyzing Cost Efficient Production Behavior Under Economies of Scope: A Nonparametric Methodology
        PY  - 2006/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 2319
        UR  - https://www.iza.org/publications/dp2319
        AB  - In designing a production model for firms that generate multiple outputs, we take as a starting point that such multi-output production refers to economies of scope, which in turn originate from joint input use and input externalities. We provide a nonparametric characterization of cost efficient behavior under these conditions, and subsequently institute necessary and sufficient conditions for data consistency with such efficient behavior that only include observed firm demand and supply data. We illustrate our methodology by examining the cost efficiency of research programs in Economics and Business Management faculties of Dutch universities. This application shows that the proposed methodology may entail robust conclusions regarding cost efficiency differences between universities within specific specialization areas, even when using shadow prices to evaluate the different inputs. 
        KW  - nonparametric tests
KW  - production behavior
KW  - multi-product firms
KW  - input externalities
KW  - joint input use
KW  - economies of scope
        ER  -