Measuring Market Power Exertion in the U.S. Ethanol Industry
AbstractThe objective of this study is to investigate potential market power exertion in the output market of the ethanol-producing sector using the Solow Residual-Based (SRB) test and its different modalities (primal and primal-dual). The markup estimates (Lerner’s index) obtained using ethanol imports and processed crudel oil as instrumental variables to estimate the primal SRB are compared to the primal-dual SRB estimates. For both approaches, a statistically significant positive markup was estimated implying the presense of market power exertion. Both markup estimates are relatively close to each other.
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Bibliographic InfoPaper provided by Agricultural and Applied Economics Association in its series 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado with number 61364.
Date of creation: 2010
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Ethanol; Market Power; Lerner's index; Solow Residual; Industrial Organization; Productivity Analysis;
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