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The High and Falling Price of Cement in Africa

Author

Listed:
  • Fabrizio Leone
  • Rocco Macchiavello
  • Tristan Reed

Abstract

Prices for several intermediate inputs, including cement, are higher in developing economies—particularly in Africa. Combining recent data from the International Comparison Program with a global directory of cement firms, we estimate an industry equilibrium model to distinguish between drivers of international price dispersion: demand, costs, conduct, and entry. Developing economies feature both higher marginal costs and higher markups. African markets are not characterized by less competitive conduct and, if anything, feature lower barriers to entry. Yet the small size of many national markets limits entry and competition and explains most of the higher markups and prices. Policy implications are discussed.

Suggested Citation

  • Fabrizio Leone & Rocco Macchiavello & Tristan Reed, 2025. "The High and Falling Price of Cement in Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 17(2), pages 1-40, April.
    • Handle: RePEc:aea:aejapp:v:17:y:2025:i:2:p:1-40
    DOI: 10.1257/app.20230352
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    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L61 - Industrial Organization - - Industry Studies: Manufacturing - - - Metals and Metal Products; Cement; Glass; Ceramics
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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