GRIFFIN ET AL.: ECONOMIC AND FINANCIAL ANALYSIS 



WARDLAW, N. J., ni, AND W. L. GRIFFIN. 



1974. Economic analysis of costs and returns for Gulf of 

 Mexico shrimp vessels: 1973. Dep. Agric. Econ. Tech. 

 Rep. 74-3, Tex. Agric. Exp. Stn., Tex. A&M Univ., College 

 Station. 



APPENDIX 



Average cost equations were estimated using 

 ordinary least squares regression analysis for 

 each of the nine groups of vessels by the use of 

 linear, quadratic, and log linear functions. In 

 general, considering all nine equations, the log 

 linear model gave the best statistical results 

 whereas the quadratic gave the worse. This 



implies that the average cost curves were ever 

 decreasing over the range of the data available. 

 Predicted values from the log linear model for the 

 nine equations were plotted by the computer on 

 one graph and compared. Because all nine plots 

 were relatively parallel, economies of scale did 

 not exist over the range of the sampled data. 



Since the plotted predicted values were rela- 

 tively parallel, one average cost equation was 

 estimated using construction, length, and effort 

 as dummy variables. All three were statistically 

 significant variables at least at the 95% level of 

 confidence in explaining the average costs of 

 producing shrimp. For a more detailed discussion 

 see Wardlaw and Griffin (1974). 



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