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Oligopoly Power in the Food and Tobacco Industries
Author(s) -
Bhuyan Sanjib,
Lopez Rigoberto A.
Publication year - 1997
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1244442
Subject(s) - oligopoly , economics , economies of scale , scale (ratio) , food industry , market power , tobacco industry , industrial organization , econometrics , microeconomics , empirical research , power (physics) , monopoly , cournot competition , food science , statistics , mathematics , physics , quantum mechanics , chemistry , political science , law
In this article we estimate and test for the degree of oligopoly power and economies of scale in forty food and tobacco industries using the New Empirical Industrial Organization (NEIO) framework and four‐digit SIC data. Lerner indices and elasticities of scale are compared throughout the entire food and tobacco industries. T‐tests verify that all but three of these industries exert statistically significant degrees of oligopoly power and that over 82% of these industries exhibit nonconstant returns to scale. The empirical results also provide estimates of the price elasticities of demand for each industry.