Randy A. Nelson
Colby College
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Featured researches published by Randy A. Nelson.
Journal of Industrial Economics | 1989
Randy A. Nelson
Capacity utilization is usually defined as the ratio of actual output to the output corresponding to (1) the minimum point on the short-run average total cost curve, and (2) the point of tangency between the long-run average total cost and short-run average total cost curves. In practice, however, capacity utilization is often measured as the ratio of actual to the maximum potential output consistent with a given capital stock. This paper demonstrates how to estimate the theoretical measures of capacity utilization, and examines the correlation between three measures of capacity utilization, and the McGraw-Hill estimates of capacity utilization, using data from a sample of U.S. privately-owned electric utilities for 1961-83. Copyright 1989 by Blackwell Publishing Ltd.
Journal of Business & Economic Statistics | 1994
Randy A. Nelson; Tim L. Tanguay; Christopher D. Patterson
This study estimates quality-adjusted price indexes for personal computers. Three separate hedonic models are estimated using data from 1,841 personal computers over the period 1984-91. In addition to the traditional linear model, a nonlinear model is developed and estimated. The nonlinear model is parsimonious in parameters, allows time-varying attribute prices, and can be estimated using a pooled data set. The results indicate that nominal quality-adjusted prices of mail-order firms declined at an average annual rate of 24.62 percent; quality-adjusted prices of major manufacturers declined at a slower rate.
Applied Economics | 1992
Randy A. Nelson; Kathleen T. Hevert
The impact of class size on economies of scale and marginal costs in higher education is examined. A multiproduct translog cost function is estimated using data from a single university. The results indicate that failure to control for class size may lead to biased estimates of economies of scale and relative marginal costs. Evidence of constant returns to scale for schools that expand output holding class size constant is found and increasing returns to scale if class size is allowed to expand. The marginal cost of graduate students is found to be 4.3 to 8.98 times that of undergraduates.
The Review of Economics and Statistics | 1984
Randy A. Nelson
This paper presents estimates of the rate of technical change in the electric power industry over the period 1951-78. The estimated model directly incorporates the effects of rate-of-return regulation, and uses both a time trend and a vintage index to represent disembodied and embodied technical change, respectively. The results indicate that disembodied technical change was the primary source of cost reduction during 1951-70, and that tighter regulation, as represented by a one point reduction in the rate of return, would have reduced the rate of technical change by an average of 1%-2% during 1951-78. 34 references, 18 footnotes, 3 tables.
Journal of Sports Economics | 2007
James W. Meehan; Randy A. Nelson; Thomas V. Richardson
This article tests for the effects of a change in competitive balance on attendance at Major League Baseball games using game-level attendance data for the 2000-2002 seasons. Employing the difference between the winning percentages of the home and visiting teams as a measure of competitive balance, the authors find (a) the effects of a change in competitive balance on attendance are not symmetric, (b) the effects of a change in competitive balance increase as a team falls further behind the divisional leader, and (c) the effects of a change in competitive balance decline throughout the season if the home team has a better record than the visiting team but increase if the home team has a worse record than the visiting team.
Southern Economic Journal | 1980
Walter J. Primeaux; Randy A. Nelson
A price/marginal-cost technique is developed for detecting the presence and direction of regulatory bias in electric-utility rate structure. The method also tests for internal subsidies between customer classes. The procedure involves a regression analysis of short- and long-term cost forecasts. A sample of 80 privately-owned utilities reveals price discrimination in favor of industrial customers, but does not indicate any political motivation. The data shows intraclass discrimination in each consumer group, which suggests that efficiency will increase if marginal prices are raised in each block. 30 references, 3 tables. (DCK)
The Review of Economics and Statistics | 1997
Randy A. Nelson; Michael R. Caputo
This study estimates rates of deterioration and depreciation for a sample of used privately owned single- and twin-engine aircraft over the period 19711991. The adoption of a strict liability standard in the 1970s lead to a 775 increase in liability expenses for the manufacturers of private planes between 1977 and 1985, resulting in sharp increases in the prices of new and used planes throughout the late 1970s and 1980s. This period of rapid price inflation coincides with a decrease in the depreciation rates for used single- and twin-engine aircraft after 1975. In addition, our results indicate that the rate of deterioration is positively related to the required cost of engine maintenance. These findings call into question the commonly invoked assumption that depreciation rates may be treated as exogenously determined constants, and lend support to the hypothesis that deterioration and depreciation rates respond systematically to key economic variables.
Southern Economic Journal | 1986
Randy A. Nelson
Beginning with Tinbergen in 1942, economists have employed a time trend in cost or production functions to represent the rate at which new technology is introduced into the production unit. In sufficiently flexible models of the production process the time trend may be used to obtain estimates of the rate, as well as direction, of technical change. The use of the time trend is generally defended on pragmatic grounds, as no theoretical justification exists for assuming that new technology is introduced at a steady rate that is independent of a firms investment in R&D, education, capital of a more recent vintage, etc. In recent years alternatives to the traditional time trend have been sought to represent the rate at which new technology is introduced. Research in this area has been concentrated in the telecommunications industry, where the stock of R&D or the percentage of calls completed by direct-dialing or modern switching facilities have been employed as technological indices by Nadiri and Schankerman [32], Denny et al. [14], and Christensen et al. [7]. The latter two studies indicate that explicit technological indices provide a better representation of the pace of innovation than the time trend. This conclusion must remain tentative, however, as it is not possible to determine what is the true direction of technical change in these studies. This shortcoming is overcome in a recent study by Kopp and Smith [24], who compare the performance of time trends and explicit technological indices in a study using pseudo data generated by process analysis models. Their results unambiguously support the use of technologically explicit indicators of technical change, and indicate that the use of a time trend may not provide a consistent estimate of the direction of technical change. This study does not, however, shed any light on the ability of a time trend to accurately reflect the rate of technical change. The purpose of this study is to investigate the effects of alternative technological indices on the estimated rate and direction of technical change in the electric power industry. The performance of a time trend is compared with that of a vintage index, computed as the average age of a firms steam generating capacity. This latter index is consistent with the notion that new technology is embodied in newly constructed capital, an assumption sup-
International Journal of Industrial Organization | 1990
Randy A. Nelson
Abstract Previous studies have examined the effects of competition on privately-owned firms. This study examines the impact of competition on a sample of publicly-owned electric utilities operating in the U.S. during 1961–1980. Estimates from a translog variable cost function indicate that competitive firms had higher generating costs than monopolists, ceteris paribus. In addition, it appears that operating costs would fall significantly if a single monopolist were to replace two competitors in a given market.
Economics Letters | 1983
Randy A. Nelson
Abstract Estimates of the Allen partial elasticities of substitution (AES) for a regulated cost function [Smith (1981)] are compared with those obtained from an unregulated cost function. The AES for capital and variable inputs are reasonably similar, but those between variable inputs differ significantly.