Since 1991 Australian telecommunications has undergone substantial reform. To a large extent, the economic correctness of pro‐competitive policy depends on the non‐existence of natural monopoly ...technology. This paper provides estimates of the Australian telecommunications system cost structure, and tests for subadditivity from 1943 to 1991. Additivity of the cost function after 1945 rejects the natural monopoly hypothesis and supports recent government policy. Diminished natural monopoly characteristics suggest that co‐ordination between firms through networking can achieve similar economies as internal co‐ordination within a monopoly. This finding is important, given the trend towards network unbundling, and service provision through interconnection.
We review the theoretical underpinnings of the exponential model, the amount of gas discovered per unit effort, a quantity called yield-per-effort (YPE), and estimate an econometric model that ...represents the historical determinants of the YPE for nonassociated gas discoveries in the lower 48 states from 1943 to 1991, the entire period for which the requisite data are available. Results indicate the YPE declines as the exponential function of cumulative drilling when short run changes in drilling effort, real gas prices, and shifts between onshore and offshore are accounted for. We explicitly test and reject the hypothesis that technological change has arrested or reversed the long run decline in YPE. We also discuss some alternative models of YPE that misrepresent the interplay of depletion and technical innovation, as well as the process of innovation itself, and the statistical and methodological shortcomings of the empirical analyses used to support several alternative models of YPE.
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