Abstract
This study investigates scale and scope economies in the Canadian property/casualty insurance. Use of the translog cost function allows the estimation of a U-shaped cost curve and of cost elasticities that vary with the size of the insurance company. The model is estimated on a sample of 180 companies over the period 1986 to 1988, and considers four outputs: property, automobile, civil liability, and other types of insurance. The factors of production are labour, rentals, and capital, but the cost of the latter is taken as a constant.
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