Distributional Effects of Competition: A Simulation Approach

Carlos Rodriguez Castelan (), Abdelkrim Araar, Eduardo Malásquez (), Sergio Olivieri and Tara Vishwanath ()
Additional contact information
Carlos Rodriguez Castelan: World Bank
Tara Vishwanath: World Bank
Authors registered in the RePEc Author Service: Carlos Rodríguez-Castelán

No 14043, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Understanding the economic and social effects of the recent global trends of rising market concentration and market power has become a policy priority. To fill this knowledge gap, this paper introduces a simple simulation method, the Welfare and Competition tool (WELCOM), to estimate with minimum data requirements the direct distributional effects of market concentration through the price channel. Using this simple yet novel tool, this paper illustrates the likely distributional effects of reducing concentration in two markets in Mexico that are known for their high level of concentration: mobile telecommunications and corn products. The results show that increasing competition from four to 12 firms in the mobile telecommunications industry and reducing the market share of the oligopoly in corn products would achieve a combined reduction of 0.8 percentage points in the poverty headcount as well as a decline of 0.32 points in the Gini coefficient.

Keywords: poverty; inequality; market concentration; distributional effects; simulation; Mexico (search for similar items in EconPapers)
JEL-codes: C15 D31 D42 D43 E37 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2021-01
New Economics Papers: this item is included in nep-com, nep-mac and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://docs.iza.org/dp14043.pdf (application/pdf)

Related works:
Working Paper: Distributional Effects of Competition: A Simulation Approach (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp14043

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().