Efficiency Effects of Exclusive Territories: Evidence from the Indiana Beer Market
AbstractThe welfare effects of vertically imposed exclusive territories and the appropriate antitrust policy toward them have long been debated. This paper sheds light on the exclusive-territory controversy by examining the effects of Indiana's 1979 ban on the grant of exclusive territories to beer wholesalers. Using time-series data for 1948-90, the authors find the ban reduced beer consumption in Indiana by 6 percent. Coupled with previous evidence that Indiana's ban reduced price, their results suggest that exclusive territories in the beer industry increase demand and enhance welfare by stimulating the provision of dealer services. Copyright 1996 by Oxford University Press.
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Bibliographic InfoPaper provided by Department of Economics, Florida State University in its series Working Papers with number 1993_09_03.
Length: 19 pages
Date of creation: 1993
Date of revision:
Other versions of this item:
- Sass, Tim R & Saurman, David S, 1996. "Efficiency Effects of Exclusive Territories: Evidence from the Indiana Beer Market," Economic Inquiry, Western Economic Association International, vol. 34(3), pages 597-615, July.
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- Suzuki, Ayako, 2009. "Market foreclosure and vertical merger: A case study of the vertical merger between Turner Broadcasting and Time Warner," International Journal of Industrial Organization, Elsevier, vol. 27(4), pages 532-543, July.
- Cooper, James C. & Wright, Joshua D., 2012. "Alcohol, antitrust, and the 21st Amendment: An empirical examination of post and hold laws," International Review of Law and Economics, Elsevier, vol. 32(4), pages 379-392.
- William James Adams, 2006. "Markets: Beer in Germany and the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 189-205, Winter.
- Cooper, James C. & Froeb, Luke M. & O'Brien, Dan & Vita, Michael G., 2005. "Vertical antitrust policy as a problem of inference," International Journal of Industrial Organization, Elsevier, vol. 23(7-8), pages 639-664, September.
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