The impact of negativity on separability testing

During separability testing, it has not been common practice to verify if t he data satisfy the negativity condition. The impacts of imposing negativit y on separability test results are examined for two groups of commodities u sing Barten's generalized demand system and with Monte Carlo simulations. R esults indicate that imposing negativity did not alter model estimates when negativity was spontaneously satisfied. Also, imposing negativity rarely a ltered separability test results when the data did not spontaneously satisf y negativity.