The Review of Economics and Statistics Vol. 93 No. 1 2011
Economies of Density and Productivity in Service Industries: An Analysis of Personal Service Industries Based on Establishment-Level Data
open access
Abstract
This study aims to empirically investigate the determinants of service industry productivity, such as economies of scale and economies of density. By using establishment-level data related to personal service industries in Japan, the study estimates the production functions for both value-added and physical output measures. In almost all the service industries examined, significant economies of scale and economies of density are observed, wherein productivity increases by 7% to 15% when the municipality population density doubles. These findings are confirmed by an estimation in which the measures of physical output are considered instead of value added.
- DOI
- 10.1162/rest_a_00065
- Volume
- 93
- Issue
- 1
- Pages
- 179-192
- Language
- en
- Sources
- openalex crossref