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Concentration in Product Markets

Author

Listed:
  • C. Lanier Benkard
  • Ali Yurukoglu
  • Anthony Lee Zhang

Abstract

This paper measures concentration in narrowly defined product markets for a broad range of consumer goods and services in the U.S. from 1994 to 2019. We document two main empirical facts. First, concentration levels are high. 44.4% of the markets in our sample are “highly concentrated” as defined by U.S. regulators. Second, market concentration has been decreasing since 1994. The median HHI falls from 2362 to 2045. These findings stand in stark contrast to the prior literature, which uses market definitions that are aggregated to a level that is typically too broad to accurately reflect competition in consumer markets.

Suggested Citation

  • C. Lanier Benkard & Ali Yurukoglu & Anthony Lee Zhang, 2021. "Concentration in Product Markets," NBER Working Papers 28745, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28745
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    Other versions of this item:

    • Benkard, C. Lanier & Yurukoglu, Ali & Zhang, Anthony Lee, 2021. "Concentration in Product Markets," Working Papers 308, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.

    References listed on IDEAS

    as
    1. Gustavo Grullon & Yelena Larkin & Roni Michaely, 2019. "Are US Industries Becoming More Concentrated?," Review of Finance, European Finance Association, vol. 23(4), pages 697-743.
    2. Shapiro, Carl, 2018. "Antitrust in a time of populism," International Journal of Industrial Organization, Elsevier, vol. 61(C), pages 714-748.
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    Cited by:

    1. Rabah Arezki & Ana Margarida Fernandes & Federico Merchán & Ha Nguyen & Tristan Reed, 2021. "Natural Resource Dependence and Monopolized Imports," CESifo Working Paper Series 9254, CESifo.
    2. Konrad Biercewicz & Urszula Chrąchol-Barczyk & Jarosław Duda & Małgorzata Wiścicka-Fernando, 2022. "Modern Methods of Sustainable Behaviour Analysis—The Case of Purchasing FMCG," Sustainability, MDPI, vol. 14(20), pages 1-24, October.
    3. Mary Amiti & Sebastian Heise, 2021. "U.S. Market Concentration and Import Competition," Staff Reports 968, Federal Reserve Bank of New York.
    4. Johannes S. Kunz & Carol Propper & Kevin E. Staub & Rainer Winkelmann, 2023. "Assessing the Quality of Public Services: For-profits, Chains, and Concentration in the Hospital Market," Papers 2023-01, Centre for Health Economics, Monash University.
    5. Jan de Loecker & Jan Eeckhout & Simon Mongey, 2021. "Quantifying Market Power and Business Dynamism in the Macroeconomy," Working Papers 1251, Barcelona School of Economics.

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    More about this item

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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