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Aggregation over Firms under Mean Scaling

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  • Barry T. Coyle

Abstract

This paper analyzes aggregation over firms assuming mean scaling, i.e., the relative distribution of micro variables is independent of the distribution of the aggregates. We emphasize cost-minimization models encompassing general functional forms and heterogeneity of outputs and technology across firms. Mean scaling implies that aggregate relations inherit properties of micro behavior. The mean scaling hypothesis is not rejected using annual time-series data on wheat production for crop districts in Manitoba. Copyright 2005, Oxford University Press.

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  • Barry T. Coyle, 2005. "Aggregation over Firms under Mean Scaling," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 366-377.
    • Handle: RePEc:oup:ajagec:v:87:y:2005:i:2:p:366-377
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2005.00728.x
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