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MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach

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  • Raper, Kellie Curry
  • Love, H. Alan

Abstract

Cigarette manufacturers' monopsony power exertion in procuring domestic and imported tobacco is investigated using nonparametric methods. While it is often assumed that tobacco program rents are captured by growers, results indicate the opposite actually occurs. Cigarette manufacturers appear to exert significant monopsony power in the domestic leaf tobacco market and capture a large portion of program rents. Cigarette manufacturers appear to exert monopsony power of much smaller magnitude in the international leaf tobacco market, but with increasing magnitude in more recent years.

Suggested Citation

  • Raper, Kellie Curry & Love, H. Alan, 1999. "MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach," Staff Paper Series 11656, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midasp:11656
    DOI: 10.22004/ag.econ.11656
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