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In the realm of empirical research, investigators are first and foremost concerned with the validity of their results, but validity is a multi-dimensional ideal. In this article we discuss two key dimensions of validity - internal and external validity - and underscore the natural tension that arises in choosing a research approach to maximize both types of validity. We propose that the most common approaches to empirical research - the use of naturally-occurring field/market data and the use of laboratory experiments - fall on the ends of a spectrum of research approaches, and that the interior of this spectrum includes intermediary approaches such as field experiments and natural experiments. Furthermore, we argue that choosing between lab experiments and field data usually requires a tradeoff between the pursuit of internal and external validity. Movements toward the interior of the spectrum can often ease the tension between internal and external validity but are also accompanied by other important limitations, such as less control over subject matter or topic areas and a reduced ability for others to replicate research. Finally, we highlight recent attempts to modify and mix research approaches in a way that eases the natural conflict between internal and external validity and discuss if employing multiple methods leads to economies of scope in research costs.

Major legislative, legal, and technological changes paved the way for a period of remarkable growth in the patenting of life science research by U.S. universities in the 1980s and 1990s. Using a multiple-output cost framework and two decades of panel data on ninety-six universities, this article examines whether economies of scope and/or scale are present in university production of three major life science research outputs: journal articles, patents, and doctorates. The results show strong evidence of economies of scale in life science research production with mixed evidence of economies of scope between articles and patents. Copyright 2007, Oxford University Press.

This article investigates the competition effects of supermarket services using fluid milk as a case study. A simultaneous equation model for services and price competition is estimated with scanner data from fifteen supermarket chains using two alternative measures of services, namely store size and principal components of in-store services. Empirical results show that increasing services results in economies of scope, greater supermarket chain-level demand, lower price elasticity of demand, and enhanced market power, leading to higher milk prices and quantity sold. We conclude that, as result of service competition, supermarkets differentiate themselves from competitors and successfully attract less price-sensitive consumers. Copyright 2007, Oxford University Press.

The classic specification of production focuses on the processing and transformation of private goods. The private nature of these goods ensures that management has complete control over the technology. For a private good technology, efficiency and productivity can be monitored by evaluation of relative input and output flows. However, not many technologies are what we might call private good technologies that involve only transformation of pure private goods. Consider technologies that interact with the environment. The study of such environmentally interactive technologies forces a wider consideration to include three further types of goods: public goods, quasi-public goods, and conditionally productive goods. Further, nonhedonistic behavioral objectives may demand attention (see, e.g., Weaver 1996). Public goods involvement in technologies has long been recognized in the context of externalities where the scope of impact of some inputs or outputs goes beyond the producing firm. These goods impact other agents in the economy as exogenous effects. Quasipublic goods are those for which consumption within the firm or by the consumer is not exhaustive, implying that their consumption impacts the productivity or utility of more than one good (e.g., output or consumption good). The role of quasi-public goods in production provides a basis for economies of scope. A final characteristic of goods that often is involved in environmentally interactive technologies is what we might label conditional productivity. An important example is found in damage or quality control inputs that are productive only in restoring output levels compromised by exposure to an externally originating factor (Carpentier and Weaver). To summarize, consideration of environmentally interactive technologies demands that attention be paid to public, quasi-public, and conditionally productive goods in addition to private goods. Faire and Grosskopf and Gollop and Swinand focus on the measurement of productivity for environmentally interactive technologies. Both papers consider the question of how productivity can be measured for technologies that go beyond the use of strictly private goods, and both limit their consideration of goods involved in environmentally interactive technologies to public goods or classic externalities.

The multiproduct cost concepts of Baumol, Panzar, and Willig are used to explore the contention of Shumway, Pope, and Nash that allocable fixed inputs cause joint production. Allocable fixed inputs may create an interdependence in the short-run cost function when none exists in the long run; however, this will not necessarily lead to joint production. For joint production to occur in the short run, either the short-run cost function must exhibit economies of scope, or stand-alone production of one of the commodities must exhibit diseconomies of size. The issue of whether allocable fixed inputs cause joint production is an empirical question.

A long-run specification of the multiproduct profit function is developed from the restricted profit function. The multiproduct restricted profit function and the envelope condition are used to estimate the optimal, long-run levels of the quasi-fixed factor. Formulas for long-run Marshallian elasticities of substitution and transformation, economies of scope, product-specific and overall economies of scale, and economic measures of capacity utilization are developed for the translog functional form. The methodology is illustrated by a case study of the New England otter trawl industry.