Non-parametric Estimates of Technology Using Generalized Additive Models: Input Separability and Regulation in Canadian Cable Television

Morteza Haghiri, Stephen M. Law, James F. Nolan

Abstract


We develop a non-parametric cost function using generalized additive models and demonstrate how to test for input separability. Our empirical example focuses on Canadian cable television (CATV) provision. We estimate a new non-parametric cost function for this industry using financial and operating data collected between 1990 and 1996. This period is of particular importance from a policy perspective because CATV in Canada was a rate- and entry-regulated industry prior to 1997. The results show that the input separability assumption holds and the generalized additive model yields reliable estimates of CATV technology during this time period.


Full Text: PDF DOI: 10.5539/ijef.v4n1p36

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This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Economics and Finance  ISSN  1916-971X (Print) ISSN  1916-9728 (Online)

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