Cost Economies And Market Power: The Case Of The U.S. Meat Packing Industry
Increasing size of establishments and resulting concentration in U.S. industries may stem from various types of cost economies. In particular, scale economies arising from technological factors embodied in plant and equipment may be a driving force for such market structure changes. In this case, typical market power measures like Lerner indices can be misleading: if scale (cost) economies prevail, cost efficiencies rather than market deficiencies may actually underlie the observed patterns. In this study, I provide measures of scale economies and market power for the U.S. meat packing industry, whose increased consolidation and concentration have raised great concern in policy circles. The results suggest that this trend has been motivated by cost economies, but that little excess profitability exists, and on the margin the potential for taking further advantage of such economies has become minimal. © 2001 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 83 (2001)
Issue (Month): 3 (August)
|Contact details of provider:|| Web page: http://mitpress.mit.edu/journals/|
|Order Information:||Web: http://mitpress.mit.edu/journal-home.tcl?issn=00346535|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Morrison, Catherine J, 1988. "Quasi-Fixed Inputs in U.S. and Japanese Manufacturing: A Generalized Leontief Restricted Cost Function Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 275-87, May.
- Azzam, Azzeddine M. & Schroeter, John R., 1995.
"The Tradeoff Between Oligopsony Power and Cost Efficiency in Horizontal Consolidation: An Example from Beef Packing,"
Staff General Research Papers Archive
5062, Iowa State University, Department of Economics.
- Azzeddine M. Azzam & John R. Schroeter, 1995. "The Tradeoff between Oligopsony Power and Cost Efficiency in Horizontal Consolidation: An Example from Beef Packing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 77(4), pages 825-836.
- Gilbert, Richard J., 1988.
"The Role of Potential Competition in Industrial Organization,"
Department of Economics, Working Paper Series
qt01s8v4v3, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Gilbert, Richard J, 1989. "The Role of Potential Competition in Industrial Organization," Journal of Economic Perspectives, American Economic Association, vol. 3(3), pages 107-127, Summer.
- Richard J. Gilbert., 1988. "The Role of Potential Competition in Industrial Organization," Economics Working Papers 8889, University of California at Berkeley.
- Robert E. Hall, 1986.
"The Relation Between Price and Marginal Cost in U.S. Industry,"
NBER Working Papers
1785, National Bureau of Economic Research, Inc.
- Hall, Robert E, 1988. "The Relation between Price and Marginal Cost in U.S. Industry," Journal of Political Economy, University of Chicago Press, vol. 96(5), pages 921-947, October.
- Azzam, Azzeddine M. & Schroeter, John R., 1997.
"Concentration in Beef Packing: Do Gains Outweigh Losses?,"
Agricultural and Applied Economics Association, vol. 12(1), pages -.
- Azzam, Azzeddine M. & Schroeter, John R., 1997. "Concentration in Beef Packing: Do Gains Outweigh Losses?," Staff General Research Papers Archive 5093, Iowa State University, Department of Economics.
- George S Olley & Ariel Pakes, 1992.
"The Dynamics Of Productivity In The Telecommunications Equipment Industry,"
92-2, Center for Economic Studies, U.S. Census Bureau.
- Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
- G. Steven Olley & Ariel Pakes, 1992. "The Dynamics of Productivity in the Telecommunications Equipment Industry," NBER Working Papers 3977, National Bureau of Economic Research, Inc.
- Berndt, Ernst R & Morrison, Catherine J, 1981. "Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach," American Economic Review, American Economic Association, vol. 71(2), pages 48-52, May.
- A. P. Lerner, 1934. "The Concept of Monopoly and the Measurement of Monopoly Power," Review of Economic Studies, Oxford University Press, vol. 1(3), pages 157-175.
- Catherine J. Morrison & Donald Siegel, 1997. "External Capital Factors And Increasing Returns In U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 647-654, November.
When requesting a correction, please mention this item's handle: RePEc:tpr:restat:v:83:y:2001:i:3:p:531-540. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristin Waites)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.