The concept of separability is closely related to aggregation. Previous studies on separability are important mainly for theoretical contributions, not for empirical results. This paper provides a theoretical justification for using the maximum capacity of a subset of inputs as an aggregate index in empirical settings. The method is demonstrated with two examples, aggregating inputs within a firm and across firms.
|Number of pages||9|
|Journal||Southern Economic Journal|
|Publication status||Published - Oct 2002|
Scopus Subject Areas
- Economics and Econometrics