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Price Variability and Industrial Concentration in U.S. Food Industries
Author(s) -
Gopinath Munisamy,
Pick Daniel,
Worth Thomas
Publication year - 2002
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2002.tb00039.x
Subject(s) - economics , agriculture , inflation (cosmology) , food industry , offset (computer science) , agricultural economics , monetary economics , product (mathematics) , food prices , relative price , price level , econometrics , food security , food science , chemistry , biology , ecology , physics , geometry , mathematics , theoretical physics , computer science , programming language
This paper focuses on the sources of intra‐industry price variability in US food industries during a period of increasing concentration, while accounting for the impact of variations in prices of primary agricultural products. Results suggest that intra‐industry price variability in food industries increases with their respective mean rate of inflation and product heterogeneity. However, industrial concentration lowers the sensitivity of relative prices to changes in the mean rate of inflation. Hence, static welfare losses to consumers from increasing concentration in food industries, a subject of recent and intensive investigation, can partly be offset by gains such as reduced price variability.