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Separability Testing in Production Economics
Author(s) -
Pope Rulon D.,
Hallam Arne
Publication year - 1988
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1241984
Subject(s) - profit (economics) , econometrics , economics , production (economics) , duality (order theory) , separable space , function (biology) , production function , mathematical economics , microeconomics , simple (philosophy) , mathematics , combinatorics , mathematical analysis , evolutionary biology , biology , philosophy , epistemology
The implications of separability in production are examined using duality. Restrictions on the profit function implied by separability of the production function, and vice versa, are derived in a simple way. These restrictions are then calculated for commonly used classes of functional forms. Then the method is used to test separability of the profit function using experimental production data. The hypothesis that the profit function was separable (plant nutrients from spacing unit costs) could not be rejected. This implies that an aggregate price index for nutrients is appropriate.