Imperfect competition in the fresh tomato industry
In this paper, we analyse the market power of the retail industry in the French tomato market. Following the methods developed in the New Empirical Industrial Organization, we develop a structural model of this industry. The analysis is based on detailed data on final consumption and prices at both shipper and consumer levels for two types of tomatoes in France. The structural model is composed of a system of demand equations, supply equations and pricing equations which include terms which capture the oligopoly and oligopsony power of the retail sector. We show that i) elasticity of demand varies during the year ii) the retail sector exercise only a ‘moderate’ market power iii) the exercise of market power decreases over time iv) If markets were competitive, in the case of tomato ‘ronde’ retail price would decrease by about 1.2% to 4.5% depending on the year; v) In absence of market power, shipping price might be 6% to 24% higher than observed. We find higher distortions in the case of tomato ‘grappe’. We also find that the distortions tend to decrease over time. We conclude to a moderate exercise of market power of the retail sector in the French tomato market.
|Date of creation:||2008|
|Contact details of provider:|| Web page: http://www.eaae.org|
More information through EDIRC
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.:
- Schroeter, John R., 1988.
"Estimating the Degree of Market Power in the Beef Packing Industry,"
Staff General Research Papers Archive
11114, Iowa State University, Department of Economics.
- Schroeter, John R, 1988. "Estimating the Degree of Market Power in the Beef Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 158-162, February.
- Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
- P. Biscourp & X. Boutin & T. Vergé, 2008.
"The Effects of Retail Regulations on Prices Evidence form the Loi Galland,"
Documents de Travail de la DESE - Working Papers of the DESE
g2008-02, Institut National de la Statistique et des Etudes Economiques, DESE.
- Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The Effects of Retail Regulations on Prices: Evidence from the Loi Galland," Economic Journal, Royal Economic Society, vol. 123(12), pages 1279-1312, December.
- Pierre Biscourp & Xavier Boutin & Thibaud Vergé, 2013. "The effects of Retail Regulations on Prices : Evidence from the Loi Galland," Working Papers 2013-49, Centre de Recherche en Economie et Statistique.
- Sexton, Richard J. & Lavoie, Nathalie, 2001. "Food processing and distribution: An industrial organization approach," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 15, pages 863-932 Elsevier.
- Daniel Hassan & Michel Simioni, 2004. "Transmission des prix dans la filière des fruits et légumes: une application des tests de cointégration avec seuils," Économie rurale, Programme National Persée, vol. 283(1), pages 27-46.
- Schroeter, John R. & Azzam, Azzeddine M., 1990. "Measuring Market Power in Multi-Product Oligopolies: The U.S. Meat Industry," Staff General Research Papers Archive 11112, Iowa State University, Department of Economics.
- Corts, Kenneth S., 1998. "Conduct parameters and the measurement of market power," Journal of Econometrics, Elsevier, vol. 88(2), pages 227-250, November.
- Howard Smith, 2004. "Supermarket Choice and Supermarket Competition in Market Equilibrium," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 235-263.
- Joyce J. Wann & Sexton Richard J., 1992. "Imperfect Competition in Multiproduct Food Industries with Application to Pear Processing," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(4), pages 980-990.
- Sexton Richard J. & Zhang Mingxia & Chalfant James A., 2005. "Grocery Retailer Behavior in Perishable Fresh Produce Procurement," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-23, February.
- Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
- Bettendorf, L & Verboven, F, 2000. "Incomplete Transmission of Coffee Bean Prices: Evidence from the Netherlands," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 27(1), pages 1-16, March.
- Barros, Pedro Pita & Brito, Duarte & de Lucena, Diogo, 2006. "Mergers in the food retailing sector: An empirical investigation," European Economic Review, Elsevier, vol. 50(2), pages 447-468, February.
- Reiss, Peter C. & Wolak, Frank A., 2007. "Structural Econometric Modeling: Rationales and Examples from Industrial Organization," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 6, chapter 64 Elsevier.
- Alexandre Gohin & Hervé Guyomard, 2000. "Measuring Market Power for Food Retail Activities: French Evidence," Journal of Agricultural Economics, Wiley Blackwell, vol. 51(2), pages 181-195.
When requesting a correction, please mention this item's handle: RePEc:ags:eaae08:44279. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.