A stochastic frontier estimator of the aggregate degree of market power exerted by the U.S. beef and pork packing industries

Athanassios Stavrakoudis and Dimitrios Panagiotou

MPRA Paper from University Library of Munich, Germany

Abstract: The objective of this study is to measure the amount of market power exercised by the U.S. red meatpacking industry using the recently developed stochastic frontier estimator of market power. The aggregate degree of market power in both the input market (cattle and hogs) and the output market (beef and pork) is estimated using annual time series data for the period 1970- 2009. The empirical results reveal that the farm-to-wholesale price spread is 4.91% and 4.16% above the marginal processing costs, in the beef and pork packing industries, respectively. These findings indicate that rather a small percentage of the farm-to-wholesale price spread can be attributed to market power in both U.S. meat packing sectors.

Keywords: beef; pork; stochastic frontier analysis; market power (search for similar items in EconPapers)
JEL-codes: C13 L66 Q11 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-agr, nep-com, nep-eff and nep-ore
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:75997

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