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A Benefit-Function Approach to Studying Market Power: An Application to the U.S. Yogurt Market

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  • Hovhannisyan, Vardges
  • Bozic, Marin

Abstract

This article provides a structural framework for studying the market performance of various food industries. It revisits the benefit-function approach to modeling demand and extends its application to the empirical industrial-organization literature. We illustrate the empirical value of our model in an econometric analysis of competitive conditions in the retail market for branded yogurt. The results show that retailers are engaged in imperfect competition. Furthermore, national brand yogurt remains an important tool for retail profitability.

Suggested Citation

  • Hovhannisyan, Vardges & Bozic, Marin, 2013. "A Benefit-Function Approach to Studying Market Power: An Application to the U.S. Yogurt Market," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), pages 1-15, August.
    • Handle: RePEc:ags:jlaare:157773
    DOI: 10.22004/ag.econ.157773
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    References listed on IDEAS

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    1. Hovhannisyan, Vardges & Stiegert, Kyle & Bozic, Marin, 2014. "On the Endogeneity of Retail Markups in an Equilibrium Analysis: A Control-Function Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 39(2), pages 1-13.
    2. Mohammed, Rezgar & Murova, Olga & Chidmi, Benaissa, 2018. "Examining Demand Elasticities for Differentiated Yogurt," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266417, Southern Agricultural Economics Association.
    3. Alessandro Bonanno & Francesco Bimbo & Marco Costanigro & Alfons Oude Lansink & Rosaria Viscecchia, 2019. "Credence attributes and the quest for a higher price – a hedonic stochastic frontier approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 46(2), pages 163-192.
    4. Vardges Hovhannisyan, 2018. "A structural model of cost pass-through: the case of the US yogurt retailing," Empirical Economics, Springer, vol. 55(2), pages 805-830, September.
    5. Mohammed, Rezgar & Murova, Olga & Chidmi, Benaissa, 2017. "Demand for Yogurt in the Trend of Manufacturer Brand and Organic Information," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252728, Southern Agricultural Economics Association.

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