Aggregation Without Separability : Tests of the United States and Mexican Agricultural Production Data

The generalized composite commodity theorem (GCCT) and testing procedure is extended to test for consistent aggregation of the United States and Mexican agricultural production data in each category for which earlier tests rejected homothetic separability. Nonrejected GCCT and separability hypotheses provide empirical support for aggregating all the United States agricultural outputs into as few as two categories: crops and livestock. Mexican agricultural outputs also can be aggregated into as few as two categories. Support for aggregating all outputs into a single category is ambiguous in both countries and is only provided by the GCCT