H. Salami, A. Kiani Rad,
Volume 5, Issue 4 (1-2002)
Abstract
This study uses the Generalized Composite Commodity Theorem (GCCT) to investigate the consistency of aggregating major crop products in studying producer’s behaviour in Iran. The results show that all crop products, except corn, soybean, and melon can consistently be grouped into cereals, oil seeds, pulses, and vegetable composite commodities. In addition, the results testing the hypothesis of the possibility of aggregating all crop products in a single group was positive when we excluded sesame, cotton, and water melon from the list. Accordingly, modeling and estimating an aggregate production or cost function for Iranian crop sector will not cause consistent biases. Additionally, one can estimate a separate or cost function for each of the above sub-sectors without causing aggregation biases in grouping the commodities.
