ESTIMATING A MULTIPLE-OUTPUT GENERALIZED BOX-COX COST FUNCTION - COST-STRUCTURE AND PRODUCTIVITY GROWTH IN BELGIAN RAILROAD OPERATIONS, 1950-1986

In this paper we estimate a multiple-output generalization of Berndt and Khaled's Box-Cox cost model to study the cost structure and growth in productivity in Belgian railroad operations. The estimated model includes several commonly used flexible functional forms as special or limiting cases. Empirical results indicate approximately constant returns to scale and an average rate of productivity growth of slightly less than 2% over the sample period. These findings were robust across cost function specifications, casting some doubt on the importance of choosing among flexible functional forms.