Abstract

CAVAZOS CEPEDA, Ricardo H.; VASQUEZ LAVIN, Felipe A.  and  HERNANDEZ MEDINA MORA, María José. Estructura de costos y economías de escala en el mercado de fondos para el retiro en México. El trimestre econ [online]. 2010, vol.77, n.306, pp.363-391. ISSN 2448-718X.

We analyze the Mexican market for pension retirement funds from a supply perspective. We focus on the effect different output definitions have on the cost structure of the firms in the market. We propose new definitions for the output produced by firms in this market. We use as outputs 1) the average amount of money in the account per month per affiliate; 2) the firm's market share measured with the number of affiliates; and 3) the firm's market share measured with the amount on money in the individualized accounts. We look at the presence of economies of scale with these new definitions. We estimate Cobb Douglas and Translog variable cost functions accounting for endogenous variables. The parameter estimates fall in line with expectations from production theory, however, we find the presence of increasing returns to scale is sensitive to the output definition. Thus, economic policy should consider not only the possible presence of economies of scale, but also the output definition of the firms in the market to archieve greater efficiency.

Keywords : sistema mexicano para el retiro; economías de escala; funciones de costos.