NEW ESTIMATES OF WELFARE AND CONSUMER LOSSES IN U.S. FOOD MANUFACTURING

John Connor () and Everett Peterson

No 116120, Working Papers from Regional Research Project NE-165 Private Strategies, Public Policies, and Food System Performance

Abstract: In the past 15 years, industrial-organization economists have significantly expanded the range of algorithms for calculating welfare losses due to imperfect competition. We compare eleven empirical estimates of economic losses due to market power in 47 U.S. food manufacturing industries, almost all of them previously unpublished. Each of the studies incorporate different theoretical assumptions about demand conditions, supply conditions, or industry pricing behavior; or they utilize various data sources, time periods, and assumptions about the proper competitive benchmark. The estimates of average allocative losses due imperfect competition range from 0.2 percent to an impossibly high 289 percent of industry output; consumer losses range from 6.0 percent to 816 percent. However, there is a high degree of congruence in the rankings of economic losses due to market power. Hence, from the perspective of antitrust enforcement, the choice of industry targets has not been greatly altered by advances in estimation techniques.

Keywords: Agribusiness (search for similar items in EconPapers)
Pages: 45
Date: 1994
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: New Estimates of Welfare and Consumer Losses in U.S. Food Manufacturing (1993)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:rpspwp:116120

DOI: 10.22004/ag.econ.116120

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