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Aggregating Capacity‐Limiting Separable Inputs

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  • Sung Ko Li

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.

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  • Sung Ko Li, 2002. "Aggregating Capacity‐Limiting Separable Inputs," Southern Economic Journal, John Wiley & Sons, vol. 69(2), pages 470-478, October.
    • Handle: RePEc:wly:soecon:v:69:y:2002:i:2:p:470-478
    DOI: 10.1002/j.2325-8012.2002.tb00504.x
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