NONPARAMETRIC MEASURES OF SCALE AND TECHNICAL CHANGE FOR COMPETITIVE FIRMS UNDER UNCERTAINTY

Measures of scale elasticity and rate of technical change can be obtai ned nonparametrically in the Sandmo model of competitive firms with no nlinear risk preference responding to output price risk. Information o n risk attitudes is not needed for measurement of scale elasticity bec ause it is observable as the ratio of average to marginal cost, as in certainty models. The cross section of panel data sets can be used to develop a nonparametric marginal cost measure, which permits identific ation of scale elasticity; the technical change measure then follows f rom the scale measure and the time-series portion of the panel data se t.