Measuring market power in the French Comté cheese market

A new empirical industrial organisation approach is used to measure seller market power in the French Comté cheese market, characterised by government-approved supply control. The estimation is performed on quarterly data at the wholesale stage over the period 1985–2005. Three different elasticity s...

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Bibliographic Details
Published in:European review of agricultural economics 2009-03, Vol.36 (1), p.31-51
Main Author: Merel, P. R.
Format: Article
Language:English
Subjects:
Agricultural and food market
Agricultural economics
Antitrust
Cheese
Common Agricultural Policy
Comté cheese
Consumer prices
Dairy industry
Economic models
Economic statistics
Economic theory
Elasticity of demand
France
Industrial organization
L13
L41
Market power
Marketing
Milk
NEIO
Opportunity costs
Production capacity
protected designation of origin
Q18
Quota systems
Studies
supply control
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Summary:A new empirical industrial organisation approach is used to measure seller market power in the French Comté cheese market, characterised by government-approved supply control. The estimation is performed on quarterly data at the wholesale stage over the period 1985–2005. Three different elasticity shifters are included in the demand specification, and the supply equation accounts for the existence of the European dairy quota policy. The market power estimate is small and statistically insignificant. Monopoly is clearly rejected. Results appear to be robust to the choice of functional form and suggest little effect of the supply control scheme on consumer prices.
ISSN:0165-1587
1464-3618
DOI:10.1093/erae/jbp004