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Retail Oligopoly Power And Fluid Milk Prices In Boston

Author

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  • Chidmi, Benaissa
  • Lopez, Rigoberto A.
  • Cotterill, Ronald W.

Abstract

This paper assesses the independent and joint impacts of oligopoly power of market intermediaries and the Northeast Dairy Compact (NEDC) on fluid milk prices in Boston. Empirical results reveal that price increases due to oligopoly power far outweighed those caused by the NEDC by more than 10 times. In fact, markups are estimated at approximately 33% of the retail milk price, translating into approximately $1/gallon overcharge at 2002 milk prices averaging around $3/gallon.

Suggested Citation

  • Chidmi, Benaissa & Lopez, Rigoberto A. & Cotterill, Ronald W., 2003. "Retail Oligopoly Power And Fluid Milk Prices In Boston," 2003 Annual meeting, July 27-30, Montreal, Canada 22107, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:22107
    DOI: 10.22004/ag.econ.22107
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    References listed on IDEAS

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    1. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    2. Johnson, Stanley R. & Stonehouse, D. Peter & Hassan, Zuhair A., 1992. "Market Demand for Dairy Products," Staff General Research Papers Archive 575, Iowa State University, Department of Economics.
    3. Dhar, Tirtha Pratim & Cotterill, Ronald W., 2002. "Two-Stage Oligopoly Pricing With Differentiated Product: The Boston Fluid Milk Market," 2002 Annual meeting, July 28-31, Long Beach, CA 19872, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. Lass, Daniel A. & Adanu, Mawunyo & Allen, P. Geoffrey, 2001. "Impacts Of The Northeast Dairy Compact On New England Retail Prices," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 30(1), pages 1-10, April.
    5. Lopez, Rigoberto A. & Altobello, Marilyn A. & Shah, Farhed A., 1994. "Amenity Benefits and Public Policy: An Application to the Connecticut Dairy Sector," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 26(2), pages 485-496, December.
    6. Amemiya, Takeshi, 1974. "The nonlinear two-stage least-squares estimator," Journal of Econometrics, Elsevier, vol. 2(2), pages 105-110, July.
    7. repec:ags:nejare:v:30:y:2001:i:1:p:83-92 is not listed on IDEAS
    8. Appelbaum, Elie, 1982. "The estimation of the degree of oligopoly power," Journal of Econometrics, Elsevier, vol. 19(2-3), pages 287-299, August.
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    Cited by:

    1. Bonanno, Alessandro & Lopez, Rigoberto A., 2004. "Private Labels, Retail Configuration, and Fluid Milk Prices," Research Reports 25222, University of Connecticut, Food Marketing Policy Center.
    2. Sckokai, Paolo & Soregaroli, Claudio & Moro, Daniele, 2009. "Estimating Market Power By Retailers In The Italian Parmigiano Reggiano And Grana Padano Cheese Market," 2009 Conference, August 16-22, 2009, Beijing, China 51425, International Association of Agricultural Economists.
    3. Cotterill, Ronald, 2004. "Milk Pricing Problems and Solutions: An Essay on the Need for New State Level Milk Price Regulation in the Northeast, with Special Attention to Connecticut Substitute Bill No. 5642," Issue Papers 169527, University of Connecticut, Food Marketing Policy Center.
    4. Bonanno Alessandro & Lopez Rigoberto A., 2005. "Private Label Expansion and Supermarket Milk Prices," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 3(1), pages 1-18, February.

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