TESTING AGGREGATION WITHOUT SEPARABILITY IN MEAT DEMAND: AN INVESTIGATION OF THE GENERALIZED COMPOSITE COMMODITY THEOREM

In the estimation of aggregate meat demand systems, weak separability is often a maintained assumption. However, only a few studies have tested and failed to reject this assumption. Recently, Lewbel (1996) developed a generalized composite commodity theorem (GCCT) that is less restrictive than weak separability. In this study, a data set in which the weak separability conditions for aggregation have been rejected is reconsidered to determine if aggregation can be based on the GCCT. Some subtleties of Lewbel's testing procedure that are not discussed by Lewbel are considered, and the fundamental problem of formulating aggregates prior to conducting tests for aggregation is addressed.