A Micro Econometric Model of Capital Utilization and Retirement

44 Pages Posted: 28 Dec 2006

Date Written: December 1990

Abstract

The paper presents a micro econometric model of capital utilization and retirement. Some estimates of a firm's discrete decision problem with regard to an existing piece of capital--whether to operate, hold idle or retire it--are obtained, in the context of the US cement industry, by solving a discrete choice stochastic dynamic programming model. The estimates are then used to simulate effects of product and input price changes, and changes in the size and age of capital on a firm's propensity to operate, hold idle and retire capital.

Suggested Citation

Das, Sanghamitra, A Micro Econometric Model of Capital Utilization and Retirement (December 1990). NBER Working Paper No. w3568. Available at SSRN: https://ssrn.com/abstract=471537

Sanghamitra Das (Contact Author)

Indian Statistical Institute ( email )

7 S.J.S. Sansanwal Marg
Planning Unit
New Delhi - 110016
India

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