This paper compares two functional forms commonly used in measuring economies of scale and scope: the generalised translog form and the composite form. The latterform is now preferred by many as the measures of scale and scope economies based on the translog form (or its generalised form when the Box-Cox transformation parameter is close to zero) can be highly unstable. The analysis in this paper shows that the composite form is also subject to a similar instability, and is generally more restrictive than the generalised translog form in measuring economies of scale and scope.

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