R: Cost Function of Electricity Producers (1955, Nerlove Data)

Electricity1955

R Documentation

Cost Function of Electricity Producers (1955, Nerlove Data)

Description

Cost function data for 145 (+14) US electricity producers in 1955.

Usage

data("Electricity1955")

Format

A data frame containing 159 observations on 8 variables.

cost: total cost.
output: total output.
labor: wage rate.
laborshare: cost share for labor.
capital: capital price index.
capitalshare: cost share for capital.
fuel: fuel price.
fuelshare: cost share for fuel.

Details

The data contains several extra observations that are aggregates of commonly owned firms. Only the first 145 observations should be used for analysis.

Source

Online complements to Greene (2003). Table F14.2.

https://pages.stern.nyu.edu/~wgreene/Text/tables/tablelist5.htm

References

Greene, W.H. (2003). Econometric Analysis, 5th edition. Upper Saddle River, NJ: Prentice Hall.

Nerlove, M. (1963) “Returns to Scale in Electricity Supply.” In C. Christ (ed.), Measurement in Economics: Studies in Mathematical Economics and Econometrics in Memory of Yehuda Grunfeld. Stanford University Press, 1963.

Examples

data("Electricity1955")
Electricity <- Electricity1955[1:145,]

## Greene (2003)
## Example 7.3
## Cobb-Douglas cost function
fm_all <- lm(log(cost/fuel) ~ log(output) + log(labor/fuel) + log(capital/fuel),
  data = Electricity)
summary(fm_all)

## hypothesis of constant returns to scale
linearHypothesis(fm_all, "log(output) = 1")

## Table 7.4
## log quadratic cost function
fm_all2 <- lm(log(cost/fuel) ~ log(output) + I(log(output)^2) + log(labor/fuel) + log(capital/fuel),
  data = Electricity)
summary(fm_all2)

## More examples can be found in:
## help("Greene2003")