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A note on commodity price aggregation bias without separability

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  • Camilo Sarmiento
  • Richard Just

Abstract

This study identifies sources of price aggregation bias when separability restrictions do not apply. It shows that even though the assumption of the generalized composite commodity theorem guarantees aggregate integrability, it does not guarantee consistent price aggregation except in the homothetic translog model.

Suggested Citation

  • Camilo Sarmiento & Richard Just, 2006. "A note on commodity price aggregation bias without separability," Applied Economics Letters, Taylor & Francis Journals, vol. 13(6), pages 365-368.
    • Handle: RePEc:taf:apeclt:v:13:y:2006:i:6:p:365-368
    DOI: 10.1080/13504850500395290
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    References listed on IDEAS

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    1. George C. Davis, 2003. "The Generalized Composite Commodity Theorem: Stronger Support in the Presence of Data Limitations," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 476-480, May.
    2. Lewbel, Arthur, 1996. "Aggregation without Separability: A Generalized Composite Commodity Theorem," American Economic Review, American Economic Association, vol. 86(3), pages 524-543, June.
    3. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
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