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Measuring Market Power Exertion in the U.S. Ethanol Industry

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  • Monge, Juan J.

Abstract

The objective of this study is to investigate potential market power exertion in the output market of the ethanol-producing sector using the Solow Residual-Based (SRB) test and its different modalities (primal and primal-dual). The markup estimates (Lerner’s index) obtained using ethanol imports and processed crudel oil as instrumental variables to estimate the primal SRB are compared to the primal-dual SRB estimates. For both approaches, a statistically significant positive markup was estimated implying the presense of market power exertion. Both markup estimates are relatively close to each other.

Suggested Citation

  • Monge, Juan J., 2010. "Measuring Market Power Exertion in the U.S. Ethanol Industry," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61364, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea10:61364
    DOI: 10.22004/ag.econ.61364
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    References listed on IDEAS

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