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Econometric Methods in Staples

Author

Listed:
  • Orley Ashenfelter

    (Princeton University)

  • David Ashmore

    (Ashenfelter and Ashmore)

  • Jonathan B. Baker

    (American University)

  • Suzanne Gleason

    (Trinity College)

  • Daniel S. Hosken

    (Federal Trade Commission)

Abstract

Econometrics played a major role in the investigation and litigation of the Federal Trade Commission's (FTC) successful challenge to the proposed merger between two office superstore chains, Staples and Office Depot. Our goal in writing this essay is to describe the econometric issues at stake in evaluating the FTC's central claim that the price charged by office supply superstores was related to the number and identity of superstore firms participating in the market. Similar statistical models were relied upon by the FTC and the merging firms to analyze pricing. Our discussion of these models highlights the advantages and disadvantages of alternative approaches to analyzing a panel data set: cross-sectional estimates versus fixed effects estimates. We also describe and evaluate modeling choices that appeared to have substantial influence on the empirical results.

Suggested Citation

  • Orley Ashenfelter & David Ashmore & Jonathan B. Baker & Suzanne Gleason & Daniel S. Hosken, 2004. "Econometric Methods in Staples," Working Papers 9, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:486
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    File URL: http://dataspace.princeton.edu/jspui/handle/88435/dsp016d56zw62f
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    Cited by:

    1. Callen, Jeffrey L. & Morel, Mindy, 2005. "The valuation relevance of R&D expenditures: Time series evidence," International Review of Financial Analysis, Elsevier, vol. 14(3), pages 304-325.

    More about this item

    Keywords

    statistical models; cross-sectional estimates; fixed effect estimates; panel data;

    JEL classification:

    • Q19 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Other
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices

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