Measuring market power in the Greek food and beverages manufacturing industry
AbstractThis paper measures the degree of market power of the Greek food and beverages manufacturing industry over the period 1983–2007 at the three-digit SIC level. The present study also estimates the “deadweight” loss and the reduction of consumers’ income due to the possible existence of market power in the Greek food and beverages manufacturing industry. Based on Bresnahan’s (1989) conjectural variation model, three different approaches are used to investigate competitive conditions of the Greek food and beverages manufacturing industry. The first approach assesses the extent of market power of the whole industry over the period 1983–2007; the second approach tests the degree of market power in each one of the nine sectors of the industry over the whole period, i.e. 1983–2007; and the third one estimates the extent of market power for the whole Greek food and beverages manufacturing industry for specific sub-periods of the period 1983–2007. The methodology of Dickson and Yu (1989) is adopted to measure the welfare losses. The empirical results indicate the presence of some degree of market power in the whole Greek food and beverages manufacturing industry as well as in each one sector of the industry during the period 1983– 2007 and, as a result, the existence of welfare losses. In addition, the empirical findings support the presence of some degree of market power for each sub-period of the period 1983– 2007 in the whole Greek food and beverages manufacturing industry and the existence of welfare losses.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland with number 114809.
Date of creation: 2011
Date of revision:
Conjectural variation; Greek food and beverages manufacturing industry; Market power; Welfare losses; Agribusiness; D43; D60; L66; Q10;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D60 - Microeconomics - - Welfare Economics - - - General
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
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- Dickson, V. A. & Yu, Weiqiu, 1989. "Welfare losses in Canadian manufacturing under alternative oligopoly regimes," International Journal of Industrial Organization, Elsevier, vol. 7(2), pages 257-267, June.
- John M Connor & Everett B. Peterson, 1996. "A Comparison of Oligopoly Welfare Loss Estimates for U.S. Food Manufacturing: Reply," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 710-711.
- Sanjib Bhuyan & Rigoberto A. Lopez, 1997. "Oligopoly Power in the Food and Tobacco Industries," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(3), pages 1035-1043.
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