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Econometric Diagnosis of Competitive Localisation: An Application to the UK National Daily Newspaper Market

Claire Morris ()

Studies in Economics from School of Economics, University of Kent

Abstract: This paper applies an econometric test of competitive localisation derived by Schmalensee (1985) to the UK national daily newspaper market. The test uses data on market shares, advertising and prices to distinguish between localised and generalised competition. The first stage of the test establishes whether generalised (symmetric) competition can be identified. If this hypothesis is rejected, further testing is required to provide evidence of competitive localisation. As in Schmalensee's own application, the results obtained decisively reject the symmetric model but are unable to confirm localisation.

Keywords: Product differentiation; competitive localisation; newspapers (search for similar items in EconPapers)
JEL-codes: L13 L60 (search for similar items in EconPapers)
Date: 1997-12
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