MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach

Kellie Raper and H. Love

No 11656, Staff Paper Series from Michigan State University, Department of Agricultural, Food, and Resource Economics

Abstract: Cigarette manufacturers' monopsony power exertion in procuring domestic and imported tobacco is investigated using nonparametric methods. While it is often assumed that tobacco program rents are captured by growers, results indicate the opposite actually occurs. Cigarette manufacturers appear to exert significant monopsony power in the domestic leaf tobacco market and capture a large portion of program rents. Cigarette manufacturers appear to exert monopsony power of much smaller magnitude in the international leaf tobacco market, but with increasing magnitude in more recent years.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 31
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ags:midasp:11656

DOI: 10.22004/ag.econ.11656

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