Competition in the Swedish Coffee Market
AbstractIt is a widespread belief that multinationals are exploiting their market power in national coffee markets by keeping consumer prices too high and thereby limiting demand for coffee beans. The purpose of this study is to test if this is case in the Swedish market for roasted coffee. In the Swedish market there are a few very large roasting companies and many small ones; a market structure that is typical of many consumer markets for coffee. To analyze the degree of market power, an oligopoly model is estimated using market time series data. The econometric approach is to first test for long-run relationships between the variables with cointegration analysis, and then to estimate a system of equations for demand and pricing behavior. Our major finding is that there is no evidence of market power in the long run, and only some in the short run.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 134.
Length: 36 pages
Date of creation: 13 Jul 2004
Date of revision:
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Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
More information through EDIRC
Coffee market; Market power; Multinationals; Oligopoly; Sweden;
Find related papers by JEL classification:
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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