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

:CHAPTER VII
SUMMARY AND CONCLUSIONS
The major results obtained in this study and their implications
are summarized below in three sections: (A) returns of scale, (B)
technological change,'and . (0 , costs and the rate structure. Following
this summary, two methods of obtaining-estimates of cost using these
results are discussed.
A. Returns to Scale
Two indications of returns to scale can be obtained from the
statistical results. One relates to the major operating unit of
waterway transportation, the towboat. The second indication of re-
turns to scale relates to the firm.
With respect to the towboat, we find in the towboat production
function a general indication of increasing returns to scale, as
measured by the capital and labor inputs. The sum of the capital and
labor coefficients of the log-linear regressions are greater than one
for companies one and three and the combined regressions, both up-
stream and downstream.
Company two is a notable exception; for both the upstream and
-downstream regressions, firm two shows decreasing. returns for the
towboat. This seeming contradiction, however, may be an important
indication of the extent of scale economies in towboat size. One
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