MARKET-STRUCTURE DETERMINANTS OF NATIONAL BRAND-PRIVATE LABEL PRICE DIFFERENCES OF MANUFACTURED FOOD PRODUCTS

John Connor () and Everett Peterson

No 116099, Working Papers from Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance

Abstract: This paper estimates the relationships between market structure and the Lerner index of monopoly constructed from price data on processed food products sold through grocery stores. A theoretical model of a differentiated oligopoly specifies two determinants of price-cost margins: the Herfindahl-Hirschman index of seller concentration adjusted for the elasticity of demand and the industry advertising-to-sales ratio. The results indicate that the three principal determinants of price-cost margin variation, in order of their impacts, are: advertising intensity, elasticity of demand, and concentration. Previous structure-performance studies that did not incorporate the elasticity of demand were probably misspecified.

Keywords: Agribusiness; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 28
Date: 1991-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Market-Structure Determinants of National Brand-Private Label Price Differences of Manufactured Food Products (1992)
Working Paper: MARKET-STRUCTURE DETERMINANTS OF NATIONAL BRAND-PRIVATE LABEL PRICE DIFFERENCES OF MANUFACTURED FOOD PRODUCTS (1987)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:rpspwp:116099

DOI: 10.22004/ag.econ.116099

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