An empirical investigation of the welfare effects of banning wholesale price discrimination

Sofia Villas-Boas

No 120491, CUDARE Working Papers from University of California, Berkeley, Department of Agricultural and Resource Economics

Abstract: Economic theory does not provide sharp predictions on the welfare effects of banning wholesale price discrimination: if downstream costs differences exist then discrimination shifts production inefficiently; towards high cost retailers; so a ban increases welfare; if differences in price elasticity of demand across retailers exist; discrimination may increase welfare if more market is covered; so a ban reduces welfare. Using retail prices and quantities of coffee brands sold by German retailers; I estimate a model of demand and supply and separate cost and demand differences. Simulating a ban on wholesale price discrimination has positive welfare effects in this market; and less if downstream cost differences shrink; or with less competition.

Keywords: Consumer/Household; Economics (search for similar items in EconPapers)
Pages: 39
Date: 2008-10-01
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: An empirical investigation of the welfare effects of banning wholesale price discrimination (2009)
Working Paper: An Empirical Investigation of the Welfare Effects of Banning Wholesale Price Discrimination (2009)
Working Paper: An Empirical Investigation of the Welfare Effects of Banning Wholesale Price Discrimination (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbecw:120491

DOI: 10.22004/ag.econ.120491

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