The Impact of Maximum Markup Regulation on Prices

Mario Pagliero, Christos Genakos and Pantelis Koutroumpis

No 10243, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We study the repeal of a regulation that imposed maximum wholesale and retail markups for all but five fresh fruits and vegetables. We compare the prices of products affected by regulation before and after the policy change and use the unregulated products as a control group. We find that abolishing regulation led to a significant decrease in both retail and wholesale prices. However, markup regulation affected wholesalers directly and retailers only indirectly. The results are consistent with markup ceilings providing a focal point for collusion among wholesalers.

Keywords: Markups; Markup regulation; Policy evaluation (search for similar items in EconPapers)
JEL-codes: L0 L1 L4 L5 (search for similar items in EconPapers)
Date: 2014-11
New Economics Papers: this item is included in nep-com and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Impact of Maximum Markup Regulation on Prices (2018)
Working Paper: The impact of maximum markup regulation on prices (2015)
Working Paper: The Impact of Maximum Markup Regulation on Prices (2014)
Working Paper: The Impact of Maximum Markup Regulation on Prices (2014)
Working Paper: The Impact of Maximum Markup Regulation on Prices (2014)
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