A SEMIPARAMETRIC STRUCTURAL-ANALYSIS OF THE IDLING OF CEMENT KILNS

This paper estimates the decision rule for idling capital at the micro (firm) level. This is done for a cement kiln by using data from the US cement industry. The decision rule for not operating a kiln at a given point in time is the standard rule: do not operate if the average variable cost exceeds price. The parameters of this discrete-decision rule are semiparametrically estimated using the maximum-score method and the estimates are then compared with the logit maximum-likelihood estimates in terms of their values as well as predictions.