Estimating the Degree of Market Power in the Beef Packing Industry

Schroeter, John R.

Review of Economics and Statistics Vol. 70 no. 1 (February 1988): 158-162.

A technique for assessing the degree of monopoly power, developed by Appelbaum (1979, 1982), is extended here to permit measurement of monopsony power as well. Data from the U.S. beef packing industry are examined. The results reveal small, but statistically significant monopoly/monopsony price distortions in slaughter cattle and wholesale beef markets but, in spite of a recent trend toward heightened concentration in the industry, give no indication that performance has become appreciably less competitive of late.

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