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Aggregating Capacity-Limiting Separable Inputs

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  • Sung Ko Li

    () (Department of Economics, Hong Kong Baptist University)

Abstract

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.

Suggested Citation

  • Sung Ko Li, 2002. "Aggregating Capacity-Limiting Separable Inputs," Southern Economic Journal, Southern Economic Association, vol. 69(2), pages 470-478, October.
  • Handle: RePEc:sej:ancoec:v:69:2:y:2002:p:470-478
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