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Table 3 also suggests that there are systematic differences in operating costs among sectors. The mining sector is used as a baseline in our estimation. In fact, mining is found among the most costly industries, along with manufacturing. The service industries, such as trade and real estate, require less operating costs to produce the same level of output.

||Table 3.|Estimate|d Cost Fu|nction by S|UR||
|---|---|---|---|---|---|---|
||Days with in|terruptions|a year|Duration of|suspensions|per day|
||Electricity|Water|Telecom|Electricity|Water|Telecom|
||_Z P1_|_Z W1_|_Z T1_|_Z P2_|_Z W2_|_Z T2_|
|_β Y_|0.595 <sup>***</sup>|0.555 <sup>**</sup>|<sup>*</sup><br>0.572 <sup>**</sup>|<sup>*</sup><br>0.610 <sup>***</sup>|0.603 <sup>**</sup>|<sup>*</sup><br>0.589 <sup>***</sup>|
||(0.030)|(0.031)|(0.032)|(0.030)|(0.030)|(0.031)|
|_β YY_|0.032 <sup>***</sup>|0.033 <sup>**</sup>|<sup>*</sup><br>0.035 <sup>**</sup>|<sup>*</sup><br>0.033 <sup>***</sup>|0.033 <sup>**</sup>|<sup>*</sup><br>0.035 <sup>***</sup>|
||(0.004)|(0.004)|(0.005)|(0.004)|(0.004)|(0.005)|
|_β W L_|0.754 <sup>***</sup>|0.751 <sup>**</sup>|<sup>*</sup><br>0.747 <sup>**</sup>|<sup>*</sup><br>0.751 <sup>***</sup>|0.750 <sup>**</sup>|<sup>*</sup><br>0.746 <sup>***</sup>|
||(0.010)|(0.010)|(0.010)|(0.010)|(0.010)|(0.010)|
|_β W L W L_|0.008 <sup>***</sup>|0.008 <sup>**</sup>|<sup>*</sup><br>0.007 <sup>**</sup>|<sup>*</sup><br>0.008 <sup>***</sup>|0.008 <sup>**</sup>|<sup>*</sup><br>0.008 <sup>***</sup>|
||(0.003)|(0.003)|(0.003)|(0.003)|(0.003)|(0.003)|
|_β W L W K_|-0.032 <sup>***</sup>|-0.033 <sup>**</sup>|<sup>*</sup><br>-0.033 <sup>**</sup>|<sup>*</sup><br>-0.032 <sup>***</sup>|-0.033 <sup>**</sup>|<sup>*</sup><br>-0.033 <sup>***</sup>|
||(0.001)|(0.002)|(0.002)|(0.002)|(0.002)|(0.002)|
|_β YW L_|-0.012 <sup>***</sup>|-0.012 <sup>**</sup>|<sup>*</sup><br>-0.012 <sup>**</sup>|<sup>*</sup><br>-0.012 <sup>***</sup>|-0.012 <sup>**</sup>|<sup>*</sup><br>-0.012 <sup>***</sup>|
||(0.001)|(0.001)|(0.001)|(0.001)|(0.001)|(0.001)|
|_β Z_|0.071 <sup>***</sup>|0.095 <sup>**</sup>|<sup>*</sup><br>0.033 <sup>*</sup>|0.156 <sup>***</sup>|0.289 <sup>**</sup>|<sup>*</sup><br>0.084|
||(0.011)|(0.016)|(0.017)|(0.041)|(0.062)|(0.057)|
|_β ZZ_|0.007 <sup>**</sup>|-0.001|0.000|0.022|-0.016|-0.010|
||(0.003)|(0.004)|(0.006)|(0.023)|(0.037)|(0.030)|
|_β YZ_|-0.008 <sup>***</sup>|-0.013 <sup>**</sup>|<sup>*</sup><br>-0.005 <sup>*</sup>|-0.020 <sup>***</sup>|-0.035 <sup>**</sup>|<sup>*</sup><br>-0.011|
||(0.002)|(0.002)|(0.003)|(0.005)|(0.008)|(0.007)|
|_β W L Z_|0.001|0.001|0.000|-0.002|-0.001|0.000|
||(0.001)|(0.001)|(0.001)|(0.002)|(0.003)|(0.003)|
|Construction|-0.130|-0.162 <sup>*</sup>|-0.172 <sup>*</sup>|-0.130|-0.164 <sup>*</sup>|-0.173 <sup>*</sup>|
||(0.091)|(0.093)|(0.094)|(0.091)|(0.093)|(0.094)|
|Manufacturing|0.127|0.096|0.096|0.120|0.092|0.097|
||(0.087)|(0.089)|(0.090)|(0.087)|(0.089)|(0.090)|
|Transport|-0.048|-0.067|-0.071|-0.045|-0.071|-0.070|
||(0.094)|(0.096)|(0.097)|(0.094)|(0.096)|(0.097)|
|Trade|-0.303 <sup>***</sup>|-0.329 <sup>**</sup>|<sup>*</sup><br>-0.334 <sup>**</sup>|<sup>*</sup><br>-0.306 <sup>***</sup>|-0.331 <sup>**</sup>|<sup>*</sup><br>-0.334 <sup>***</sup>|
||(0.089)|(0.091)|(0.091)|(0.089)|(0.091)|(0.092)|
|Real estate|-0.425 <sup>***</sup>|-0.449 <sup>**</sup>|<sup>*</sup><br>-0.446 <sup>**</sup>|<sup>*</sup><br>-0.429 <sup>***</sup>|-0.453 <sup>**</sup>|<sup>*</sup><br>-0.445 <sup>***</sup>|
||(0.093)|(0.095)|(0.096)|(0.093)|(0.095)|(0.096)|
|Hotels & restaurant|-0.088|-0.129|-0.117|-0.081|-0.132|-0.116|
||(0.095)|(0.098)|(0.098)|(0.095)|(0.098)|(0.098)|
|Other services|-0.292 <sup>***</sup>|-0.330 <sup>**</sup>|<sup>*</sup><br>-0.310 <sup>**</sup>|<sup>*</sup><br>-0.287 <sup>***</sup>|-0.327 <sup>**</sup>|<sup>*</sup><br>-0.310 <sup>***</sup>|
||(0.098)|(0.100)|(0.100)|(0.098)|(0.100)|(0.101)|
|Cons|0.566 <sup>***</sup>|0.899 <sup>**</sup>|<sup>*</sup><br>0.702 <sup>**</sup>|<sup>*</sup><br>0.434 <sup>***</sup>|0.547 <sup>**</sup>|<sup>*</sup><br>0.585 <sup>***</sup>|
||(0.134)|(0.148)|(0.152)|(0.135)|(0.136)|(0.137)|
|Obs.|4280|4195|4195|4279|4195|4194|
|R-squared|||||||
|Cost equation|0.624|0.627|0.631|0.625|0.628|0.631|
|Share equation|0.125|0.124|0.124|0.125|0.124|0.124|
|Note that the depend|ent variable|is thelogarit|hmic operatin|g cost. The sta|ndard errors|are shown in|
|parentheses. *, ** an|d *** repres|ent the 10%,|5% and 1% l|evel significa|nce, respecti|vely.|
|Source: Author’|s calculat|ion.|||||

The quality of infrastructure has been found to matter, particularly in the electricity and water sectors. Table 4 calculates the elasticity of operating costs with respect to each infrastructure variable. It is evaluated at sample means and estimated by the delta method. The table shows