Cost structure in college and university student health centres: comment

Abstract

Brady, Assane and Karstensson in their earlier paper (1994) in this journal estimated a translog cost model of college and university health centres. They reported economies of scale estimates, as well as mean value elasticity estimates for factor demands and substitutions. In this comment, we: (1) correct their implied assumption that the pairwise, cross-price elasticities of factor substitutions are symmetrical, and (2) use their factor cost shares and regression parameter estimates to compute asymptotic standard errors for the various elasticities in order to test their statistical significance. Extended implications from our findings are discussed.