Premium
Input substitution and demand in the water supply production process
Author(s) -
Kim H. Youn,
Clark Robert M.
Publication year - 1987
Publication title -
water resources research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.863
H-Index - 217
eISSN - 1944-7973
pISSN - 0043-1397
DOI - 10.1029/wr023i002p00239
Subject(s) - production (economics) , substitution (logic) , derived demand , capital (architecture) , supply and demand , service (business) , process (computing) , water supply , economies of scale , function (biology) , economics , scale (ratio) , environmental economics , demand curve , microeconomics , environmental science , computer science , environmental engineering , economy , programming language , operating system , physics , archaeology , quantum mechanics , evolutionary biology , biology , history
The structure of input demand for U.S. water utilities is analyzed by estimating a translog cost function. An important feature of the model includes the multiproduct specification of the water supply production process. Operating variables are also specified to include capacity utilization and service distance, which are considered important for delivery of water supply. Results show that capital is a substitute for both energy and labor, but that no strong substitution possibilities exist between energy and labor. Energy is an input which requires intensive use in water production. Small utilities are found to enjoy economies of scale. Capacity utilization and service distance are found to have significant effects on input demand.