Q2 Z2,(Q2) Z2(Q2) - Institute for Water Resources - U.S. Army

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linear form of- the functions have been specified. The arguments for
this specification have already been given in Chapter IV.
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C. The Results
Results for all cost categories are presented in Tables 21-23.
Four regressions are presented for each category of cost, one for each
alternative measure of firm size, to allow comparison. With the ex-
ception of indirect cost there is little to distinguish between the
four regressions for each cost category. Since the results using the
number of barges as the firm size variable appear to be generally
better, these results have been used in the discussion below.
Indirect Costs
Indirect costs represent expenses incurred by the firm which
cannot be allocated to particular levels of output. These are the
costs associated with general office and management expense, record
. .
keeping, sale of services, and the scheduling, and cbordination of
shipments and equipment. .
. Table 21 presents the indirect cost results for each of the
firm size measures. In comparing the results across firm size mea-
sures, an apparent contradiction is evident in the firm size coeffi-
cients. The two towboat measures show a strong positive relationship
with average indirect cost, whereas the two barge measures show a
strong negative relationship with average indirect cost.
It would be expected, ceterus paribus, that if the "correct"
firm size measure was used, average indirect costs wbuld fall as
firm size increased. For example, we would expect to find economies
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