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Measuring Market Power and Cost-Efficiency Effects of Industrial Concentration

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Author Info
Azzam, Azzeddine M

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Abstract

In this paper, the author shows how E. Appelbaum's framework for testing price-taking behavior in a single industry can be formally extended to consider concentration explicitly. In so doing, he separates the market power effect of concentration from its cost-efficiency effect. Data from the U.S. beef-packing industry are used to illustrate an empirical application of the model. The findings support oligopsonistic market power and slaughter-cost efficiency in the industry. However, the cost-efficiency effect outweighs the market-power effect. Copyright 1997 by Blackwell Publishing Ltd

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Publisher Info
Article provided by Blackwell Publishing in its journal Journal of Industrial Economics.

Volume (Year): 45 (1997)
Issue (Month): 4 (December)
Pages: 377-86
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Handle: RePEc:bla:jindec:v:45:y:1997:i:4:p:377-86

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0022-1821

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  1. Lynn Hunnicutt & David Aadland, 2002. "Market Power with Dynamic Invertory Constraints: The Bias in Standard Measures," Working Papers 2002-15, Utah State University, Department of Economics. [Downloadable!]
    Other versions:
  2. Lopez, Rigoberto A. & Azzam, Azzeddine M. & Liron-Espana, Carmen, 2001. "Market Power and/or Efficiency: An Application to U.S. Food Processing," Research Reports 25160, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
  3. Sandra Rodríuez Piñeros & David K. Lewis, 2005. "Estimating the Imperfection in Sawtimber markets: a case study for the South Pacific Region, Colombia," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 63, pages 231-260, Julio-Dic. [Downloadable!]
  4. Schröder, Philipp J.H. & Jørgensen, Jan G., 2001. "Reductions in Real versus Tariff Barriers: The Effects on Industry Concentration," MPRA Paper 124, University Library of Munich, Germany. [Downloadable!]
  5. Fernandez-Cornejo, Jorge & Spielman, David, 2002. "Concentration, Market Power, And Cost Efficiency In The Corn Seed Industry," 2002 Annual meeting, July 28-31, Long Beach, CA 19877, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  6. Stiegert, Kyle & Carton, Olivier, 1998. "Increasing Concentration In The U.S. Hard Wheat Milling Industry," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20860, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  7. Unterschultz, James R. & Jeffrey, Scott R. & Quagrainie, Kwamena K., 2000. "Value-Adding 20 Billion By 2005: Impact At The Alberta Farm Gate," Project Report Series 24049, University of Alberta, Department of Rural Economy. [Downloadable!]
  8. Rigoberto Lopez & Azzeddine Azzam & Carmen Lirón-España, 2002. "Market Power and/or Efficiency: A Structural Approach," Review of Industrial Organization, Springer, vol. 20(2), pages 115-126, March. [Downloadable!] (restricted)
  9. Crespi, John M. & Xia, Tian & Jones, Rodney, 2008. "Competition, Bargaining Power, and the Cattle Cycle," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6263, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  10. Gopinath, Munisamy & Pick, Daniel & Li, Yonghai, 2002. "Does Industrial Concentration Raise Productivity In Food Industries?," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36634, Western Agricultural Economics Association. [Downloadable!]
  11. Liron-Espana, Carmen & Lopez, Rigoberto A., 2001. "When is Concentration Beneficial?," Research Reports 25201, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
  12. Tostao, Emilio & Chung, Chanjin & Brorsen, B. Wade, 2006. "Integrating the Structural Auction Approach and Traditional Measures of Market Power," 2006 Annual meeting, July 23-26, Long Beach, CA 21244, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  13. Kim, C.S. & Hallahan, C. & Taylor, H. & Schluter, G., 2002. "Market Power And Cost-Efficiency Effects Of The Market Concentration In The U.S. Nitrogen Fertilizer Industry," 2002 Annual meeting, July 28-31, Long Beach, CA 19674, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  14. Steiner, Bodo, 2007. "Formal beef alliances and alignment challenges: issues in contracting, pricing and quality," Project Report Series 7709, University of Alberta, Department of Rural Economy. [Downloadable!]
  15. John M. Connor, 2003. "The Changing Structure Of Global Food Markets: Dimensions, Effects, And Policy Implications," Working Papers 03-02, Purdue University, College of Agriculture, Department of Agricultural Economics. [Downloadable!]
  16. Ronchi, Loraine, 2006. "Fairtrade and market failures in agricultural commodity markets," Policy Research Working Paper Series 4011, The World Bank. [Downloadable!]
  17. Key, Nigel & MacDonald, James, 2008. "Local Monopsony Power in the Market for Broilers - Evidence from a Farm Survey," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6073, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  18. Cotterill, Ronald W. & Dhar, Tirtha, 2003. "Oligopoly Pricing with Differentiated Products: The Boston Fluid Milk Market Channel," Research Reports 25189, University of Connecticut, Food Marketing Policy Center. [Downloadable!]
  19. Guci, Ledia & Brown, Mark G., 2007. "Changes in the Structure of the Florida Processed Orange Industry and Potential Impacts on Competition," Research Papers 2007 36811, Florida Department of Citrus. [Downloadable!]
  20. Panagiotou, Dimitrios, 2005. "Cointegration, Error Correction, And The Measurement Of Oligopsony Conduct In The U.S. Cattle Market," 2005 Annual meeting, July 24-27, Providence, RI 19201, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
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