SPATIAL COMPETITION AND PRICING IN THE AGRICULTURAL CHEMICAL INDUSTRY: EMPIRICAL EVIDENCE FROM GEORGIA

R. Lee Hall, Jeffrey Dorfman () and Lewell F. Gunter

No 18984, 2003 Conference, April 21-22, 2003, St. Louis, Missouri from NCR-134 Conference on Applied Commodity Price Analysis, Forecasting, and Market Risk Management

Abstract: Three models of spatial competition are tested on retail price data for the agricultural chemical industry. Three empirical tests find no evidence of any spatial competition using data from sixty-five retailers and twelve different chemicals. Demand and supply-side variables have statistically significant, but economically trivial impacts on retail chemical prices. These results point to a virtually complete control of retail prices by the chemical manufacturers, likely through the rebate program they offer retailers. The oligopoly structure of the chemical manufacturing industry makes such control possible. The results suggest that consolidation of retailers or distributors will not have anti-competitive effects since price competition is essentially absent from this market already.

Keywords: Industrial; Organization (search for similar items in EconPapers)
Pages: 15
Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ncrthr:18984

DOI: 10.22004/ag.econ.18984

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