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Identification of Market Power in the Hungarian Dairy Industry: A Plant-Level Analysis

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  • Perekhozhuk Oleksandr

    () (Department of Agricultural Markets, Marketing and World Agricultural Trade, Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO), Theodor-Lieser-Strasse 2, Halle/Saale 06120, Germany)

  • Hockmann Heinrich

    () (Leibniz Institute of Agricultural Development in Central and Eastern Europe (IAMO), Halle/Saale 06120, Germany)

  • Fertő Imre

    () (Institute of Economics, Hungarian Academy of Sciences, Budapest, Hungary)

  • Bakucs Lajos Zoltán

    () (Institute of Economics, Hungarian Academy of Sciences, Budapest, Hungary)

Abstract

The objective of this paper is to provide an alternative model which can be used to test for oligopsony market power applying plant-level data. For this purpose, we took into account empirical studies and specific developments in the Hungarian dairy industry and specified a model that provides useful benchmarks for an econometric test of market power. The results of the econometric analysis show that the effects from policy changes in Hungary, as well as from plant specific issues are highly statistically significant, and produce evidence suggesting the exercise of oligopsony market power in the Hungarian dairy industry.

Suggested Citation

  • Perekhozhuk Oleksandr & Hockmann Heinrich & Fertő Imre & Bakucs Lajos Zoltán, 2013. "Identification of Market Power in the Hungarian Dairy Industry: A Plant-Level Analysis," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 1-13, January.
  • Handle: RePEc:bpj:bjafio:v:11:y:2013:i:1:p:1-13:n:1
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    References listed on IDEAS

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    1. Koontz, Stephen R. & Garcia, Philip, 1997. "Meat-Packer Conduct In Fed Cattle Pricing: Multiple-Market Oligopsony Power," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 22(01), July.
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    Cited by:

    1. Čechura, Lukáš & Žáková Kroupová, Zdeňka & Hockmann, H., 2015. "Market Power in the European Dairy Industry," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(4), December.
    2. Cechur, Lukas & Hockmann, Heinrich & Levkovych, Inna, 2015. "Do the EU food processors abuse Oligopsony market power?," 2015 Conference, August 9-14, 2015, Milan, Italy 212043, International Association of Agricultural Economists.
    3. Å piÄ ka, JindÅ™ich & Kontsevaya, S. R., 2016. "Differences of Financial Management Strategy of Central European and Russian Milk Processors," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 8(1), March.
    4. Zavelberg, Yvonne & Wieck, Christine & Heckelei, Thomas, 2015. "How can differences in German raw milk prices be explained? An empirical investigation of market power asymmetries," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205489, Agricultural and Applied Economics Association;Western Agricultural Economics Association.
    5. Perekhozhuk Oleksandr & Hockmann Heinrich & Fertő Imre & Bakucs Lajos Zoltán, 2013. "Identification of Market Power in the Hungarian Dairy Industry: A Plant-Level Analysis," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 1-13, January.
    6. repec:cmj:seapas:y:2018:i:16:p:7-19 is not listed on IDEAS
    7. Imre Ferto & Attila Jambor, 2015. "Drivers of vertical intra-industry trade: the case of the Hungarian agri-food sector," Agricultural Economics, International Association of Agricultural Economists, vol. 46(1), pages 113-123, January.

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