| This thesis provides a review of natural monopoly theory, the theory of the firm from a cost perspective in a multiple output environment, and an econometric application of this theory to interprovincial natural gas pipelines in Canada.;We investigate single and multiple output cost function properties in output space as well as the necessary and sufficient for natural monopoly (subadditivity) in both cases. We then estimate several trans-log cost functions with data collected regarding TransCanada PipeLines and test these functions for indirect and direct evidence of subadditivity. |
