Growing Oligopolies, Prices, Output, and Productivity

Sharat Ganapati

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: American industries have grown more concentrated over the last forty years. In the absence of productivity innovation, this should lead to price hikes and output reductions, decreasing consumer welfare. Using public data from 1972-2012, I use price data to disentangle revenue from output. Difference-in-difference estimates show that industry concentration increases are positively correlated to productivity and real output growth, uncorrelated with price changes and overall payroll, and negatively correlated with labor’s revenue share. I rationalize these results in a simple model of competition. Productive industries (with growing oligopolists) expand real output and hold down prices, raising consumer welfare, while maintaining or reducing their workforces, lowering labor’s share of output.

Pages: 47 pages
Date: 2018-11
New Economics Papers: this item is included in nep-com and nep-ind
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Citations: View citations in EconPapers (4)

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https://www2.census.gov/ces/wp/2018/CES-WP-18-48.pdf First version, 2018 (application/pdf)

Related works:
Journal Article: Growing Oligopolies, Prices, Output, and Productivity (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:18-48

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