Exit from the Meatpacking Industry: A Microdata Analysis

Donald W. Anderson, Brian Murray, Jackqueline L. Teague and Richard Lindrooth

American Journal of Agricultural Economics, 1998, vol. 80, issue 1, 96-106

Abstract: We model the determinants of plant exit from the cattle-slaughter industry using probit to distinguish between plant-level (e.g., age, scale, and scope) and market-level (e.g., market share, concentration, and competitive fringe) factors. Market variables are shown to be less important determinants of exit than plant-level factors, though a significant tendency for very small plants to exit already highly concentrated markets is apparent. Government actions to stem the industry's consolidation must consider the trade-off between welfare gains from the reduction of market power and welfare losses from foregone technological efficiency improvements. Copyright 1998, Oxford University Press.

Date: 1998
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