In this chapter we take the final step in bridging the gap between the theory and the data. Thus the first subject for discussion will be the nature of the primary data base used in the study and the datacleaning process (Section 6.1). The subsequent four sections are devoted to discussion of the measurement of each of the four variables identified in earlier chapters as being major determinants of the shift-work decision: capital intensity (Section 6.2), the elasticity of substitution (Section 6.3), the degree of economies of scale (Section 6.4), and the shift differential (Section 6.5). The empirical specifications of the working-capital hypotheses introduced in Chapter 2, Section 2.4, constitute the subject of Section 6.6. In the last section we put together the discussion of the previous ones, and we conclude by setting out in tabular form the models to be implemented empirically with our data.

Before addressing the topics just outlined, we should indicate some general characteristics of the subsequent sections. One way of viewing the discussion to be undertaken here is simply as the specification of the independent variables in terms of the actual data available in our samples. Thus, the distinction between the restricted-form specification and the free-form specification of the independent variables, introduced in Chapter 4, plays an important role in the subsequent arguments.