Scalable Demand and Markups

Enghin Atalay, Erika Frost, Alan Sorensen, Christopher Sullivan and Wanjia Zhu

Journal of Political Economy, 2026, vol. 134, issue 8, 2488 - 2522

Abstract: We study changes in markups across 70 product markets from 2006 to 2018. A growing literature has documented rising markups using a production function approach. We instead estimate demand and invert firms’ first-order pricing conditions to infer markups. To make the method scalable, we propose estimating nested logit demand models using household panel data to automate the assignment of products to nests. We find an overall upward trend in markups, with considerable heterogeneity across and within product markets. These increases are primarily driven by changes in firms’ marginal costs and households’ price sensitivity instead of changes in firm ownership.

Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
http://dx.doi.org/10.1086/741641 (application/pdf)
http://dx.doi.org/10.1086/741641 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
Working Paper: Scalable Demand and Markups (2023)
Working Paper: Scalable Demand and Markups (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:jpolec:doi:10.1086/741641

Access Statistics for this article

More articles in Journal of Political Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().