MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach
AbstractCigarette manufacturers' monopsony power exertion in procuring domestic and imported tobacco is investigated using nonparametric methods. While it is often assumed that tobacco program rents are captured by growers, results indicate the opposite actually occurs. Cigarette manufacturers appear to exert significant monopsony power in the domestic leaf tobacco market and capture a large portion of program rents. Cigarette manufacturers appear to exert monopsony power of much smaller magnitude in the international leaf tobacco market, but with increasing magnitude in more recent years.
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Bibliographic InfoPaper provided by Michigan State University, Department of Agricultural, Food, and Resource Economics in its series Staff Papers with number 11656.
Date of creation: 1999
Date of revision:
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market power; tobacco; nonparametric; monopsony; imports.; International Relations/Trade; L1;
Find related papers by JEL classification:
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
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