Defining the Relevant Product Market: An Application of Price Tests to the Beer Market in Barbados

Rommell Hippolyte ()

MPRA Paper from University Library of Munich, Germany

Abstract: This paper attempts to determine if beer is a separate relevant product market from rum and soft drinks. Three conventional statistical tests - Pearson’s correlation, unit root and Granger causality - are applied to average monthly retail price data from Barbados for the three categories of beverages for the period January 2012 to July 2015. The results of both the correlation and Granger causality tests suggest that beer is a distinct product market from rum and soft drinks, while the result of the unit root test was inconclusive. The results of the paper should interest practitioners of competition law in the Caribbean region as it shows that price tests could be used as quantitative proof on market boundaries to support the intuition and evidence the traditional Small but Significant Non-transitory Increase in Price (SSNIP) test provides.

Keywords: price tests; relevant market; beverages; competition law; Barbados (search for similar items in EconPapers)
JEL-codes: K21 L40 (search for similar items in EconPapers)
Date: 2016-10-24
New Economics Papers: this item is included in nep-com and nep-ind
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:76183

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