Economies of scale in steam-electric power generation in East-North-Central U.S.
In this study the author investigates firm-level cross-sectional unit cost advantages for electricity generation for 31 regulated private steam-electric utilities in East-North-Central U.S. region during 1987. The production technology is modeled using the implied dual minimum total variable cost translog methodology. Estimates of Zellner's Seemingly Unrelated Regressions indicate a smooth non-homothetic technology, a typical regional firm-level scale economies of about 0.263, and an implied mean cost-output elasticity of about 0.737. Significant scale economies exist for several of the smaller utilities. The findings support policies which steer energy-intensive industrial location decisions in a direction which captures unutilized unit cost economies in electricity generation. © 1993 Springer.
Journal of Economics and Finance
Okunade, A. (1993). Economies of scale in steam-electric power generation in East-North-Central U.S.. Journal of Economics and Finance, 17 (1), 149-156. https://doi.org/10.1007/BF02920090