(1) National Graduate Institute for Policy Studies, 7-22-1 Roppongi, Minato-ku, Tokyo 106-8677, Japan;(2) Amrita School of Business, Amrita Vishwa Vidyapeetham, Ettimadai Post, Coimbatore, 641 105, India
Abstract:
We propose a new scheme for measuring scale elasticity of production based on a new cost efficiency model developed in Tone (2002). Comparing our model with classical model we establish the superiority of our model over the latter based on the premise that the classical estimates of cost efficiency and scale elasticity can be illusory.