A cost function for the natural gas transmission industry: further considerations - Archive ouverte HAL Access content directly
Preprints, Working Papers, ... Year :

A cost function for the natural gas transmission industry: further considerations

(1)
1
Olivier Massol
  • Function : Author
  • PersonId : 958727

Abstract

This article studies the cost function for the natural gas transmission industry. 60 years ago, Hollis B. Chenery published an important contribution that demonstrated how, in that particular industry, the production function of microeconomic theory can be rewritten with engineering variables (Chenery, 1949). In 2008, an article published in The Engineering Economist (Yépez, 2008) provided a refreshing revival on Chenery's seminal thoughts. In addition to a tribute to the late H.B. Chenery, this document offers some further comments and extensions on Yépez (2008). It provides a statistically estimated characterisation of the long-run scale economies and a discussion on the short-run economics of the duplication of existing equipments. As a first extension, we study the optimal design for infrastructure that is planned to transport a seasonally-varying flow of natural gas. The second extension analyzes the optimal degree of excess capacity to be built into a new infrastructure by a firm that expects a random rise in its output during the infrastructure's lifetime.
Fichier principal
Vignette du fichier
ECO75_VA.pdf (272.22 Ko) Télécharger le fichier
Origin : Files produced by the author(s)
Loading...

Dates and versions

hal-02469553 , version 1 (06-02-2020)

Identifiers

  • HAL Id : hal-02469553 , version 1

Cite

Olivier Massol. A cost function for the natural gas transmission industry: further considerations: Cahiers de l'Economie, Série Recherche, n° 75. 2009. ⟨hal-02469553⟩
27 View
104 Download

Share

Gmail Facebook Twitter LinkedIn More