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Price and Cost Impacts of Concentration in Food Manufacturing Revisited

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  • Lopez, Rigoberto A.
  • Liron-Espana, Carmen

Abstract

This study estimates the elasticities of wholesale food prices, cost efficiency, and market power with respect to industrial concentration in 35 food processing industries, modifying the model of Lopez, Azzam, and Lirón-España (2002). In contrast to the results of their earlier analysis, findings of this study indicate that further increases in concentration would result in significant processing cost savings (and Lerner index increases) in nearly all industries and that output prices would decline in nearly 50% of the industries, although significantly so in only 20% of them. As industrial concentration rises, price declines occur in industries with low levels of concentration while price increases occur in highly concentrated industries.

Suggested Citation

  • Lopez, Rigoberto A. & Liron-Espana, Carmen, 2005. "Price and Cost Impacts of Concentration in Food Manufacturing Revisited," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 23(1), pages 1-15.
    • Handle: RePEc:ags:jloagb:59610
    DOI: 10.22004/ag.econ.59610
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    References listed on IDEAS

    as
    1. Dickson Vaughan A & Sun Yingfeng, 2004. "Revisiting the Price Effects of Rising Concentration in U.S. Food Manufacturing," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 2(1), pages 1-17, December.
    2. Catherine J. Morrison Paul, 2001. "Cost Economies And Market Power: The Case Of The U.S. Meat Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 531-540, August.
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