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A Simple Test of Oligopsony Behavior with an Application to Rice Milling

Author

Listed:
  • Crespi John M.

    (Kansas State University)

  • Gao Zhifeng

    (Kansas State University)

  • Hanawa Peterson Hikaru

    (Kansas State University)

Abstract

While the development of empirical models of seller conduct abound, arguably less attention has been paid to the development of empirical models of buyer conduct. This is especially problematic in studies of food and agricultural industries where high buyer concentration along the supply chain is the norm. The purpose of this paper is to provide one more tool in the toolkit of econometric estimation of oligopsony behavior, in particular for those cases where researchers may have rather limited data sets. We derive a set of equations to estimate buyer market power with fewer equations and less formal functional specifications than are typically used in such studies. We apply the model to the U.S. rice industry finding a degree of oligopsony behavior consistent with that found in studies of other agricultural markets.

Suggested Citation

  • Crespi John M. & Gao Zhifeng & Hanawa Peterson Hikaru, 2005. "A Simple Test of Oligopsony Behavior with an Application to Rice Milling," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(2), pages 1-19, August.
    • Handle: RePEc:bpj:bjafio:v:3:y:2005:i:2:n:6
    DOI: 10.2202/1542-0485.1117
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    References listed on IDEAS

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    1. Azzeddine M. Azzam & John R. Schroeter, 1995. "The Tradeoff between Oligopsony Power and Cost Efficiency in Horizontal Consolidation: An Example from Beef Packing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 825-836.
    2. Muth, Mary K. & Wohlgenant, Michael K., 1999. "Measuring The Degree Of Oligopsony Power In The Beef Packing Industry In The Absence Of Marketing Input Quantity Data," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(2), pages 1-14, December.
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    Cited by:

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    2. Sheldon, Ian M., 2017. "The Competitiveness Of Agricultural Product And Input Markets: A Review And Synthesis Of Recent Research," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(1), pages 1-44, February.
    3. Rezitis, Anthony N., 2010. "Evaluating the state of competition of the Greek banking industry," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 20(1), pages 68-90, February.
    4. Perekhozhuk, O. & Chezhia, G. & Glauben, T., 2018. "Testing for oligopsony power in the Kazakh grain processing industry: A Hall approach," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 275964, International Association of Agricultural Economists.
    5. Evans Edward & H. Ballen Fredy, 2016. "Testing for Oligopsony Power in the US Green Skin Avocado Market," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 43-50, May.
    6. Guci, Ledia & Brown, Mark G., 2007. "Changes in the Structure of the Florida Processed Orange Industry and Potential Impacts on Competition," Research papers 36811, Florida Department of Citrus.
    7. Wilhelmsson Fredrik, 2006. "Market Power and European Competition in the Swedish Food Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 4(1), pages 1-26, October.
    8. Rezitis, Anthony N. & Kalantizi, Maria A., 2012. "Investigating market structure of the Greek food and beverages manufacturing industry: A Hall-Roeger approach," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 13(1), pages 1-17.

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