DIRECT SEPARABILITY IN MULTIOUTPUT TECHNOLOGIES - AN APPLICATION TO THE ITALIAN AGRICULTURAL SECTOR

The hypothesis of direct weak separability of the transformation funct ion places fewer restrictions on production technology than those deri ving from alternative multi-stage procedures, based on indirect separa bility assumptions. We derive an explicit form of the necessary and su fficient conditions for direct weak separability in the multiple outpu t case. These conditions are expressed in elasticity terms, so they ca n be readily maintained or tested in commonly used flexible functional forms. Parametric restrictions are derived for the multi-output trans log profit function. The procedure is applied to the Italian agricultu ral sector.