Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We develop statistical tests to formally test the convexity axiom for cost functions by extending a recently developed statistical tests in nonparametric models of production. The tests are applied to a panel of US electric power generation plants and strong evidence against convexity is found for most years in the resulting cost functions. Our results suggest that empirical researchers need to be more cautious about the often implicit embedding of the convexity assumption for the cost functions.