Economies of Scale in Air Force Undergraduate Pilot Training
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH SCHOOL OF SYSTEMS AND LOGISTICS
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The Air Force undergraduate pilot training program was examined to determine whether economies or diseconomies of scale existed in the production of undergraduate pilots. The study used the training costs and output data associated with all training bases from FY 68 through FY 79. Cross-sectional data was used to determine the long run average cost LAC curve for each fiscal year, and time-series data was used to determine the LAC curve for each base and the aggregate of all bases. Four models linear, quadratic, logarithmic, and power were evaluated by the regression analysis technique to determine which model provided the best fitting LAC curve to the empirical observations. The results indicated that the power model provided the best fitting relationship for the cross-sectional data, and the logarithmic model provided the best fitting relationship for the time-series data. The resultant LAC curves displayed an inverse relationship between average cost and graduate pilot production in all cases. This confirmed the existence of economies of scale in pilot production over the years studied. The inverse relationship also implied that this consolidation of training bases during this period resulted in a decreased average cost per graduate pilot.
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