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Journal of Agricultural & Food Industrial Organization

Ed. by Azzam, Azzeddine

1 Issue per year

Measuring the Degree of Retail Competition in U.S. Cheese Markets

Carlos Arnade1 / Munisamy Gopinath2 / Daniel Pick3

1Economic Research Service, USDA

2Oregon State University, Corvallis, Oregon, USA

3Economic Research Service, USDA

Citation Information: Journal of Agricultural & Food Industrial Organization. Volume 5, Issue 1, ISSN (Online) 1542-0485, DOI: 10.2202/1542-0485.1151, February 2007

Publication History:
Published Online:
2007-02-02

The objective of this article is to measure the degree of competition among retail stores to sell a specific brand of a product. For this purpose, we estimate brand-specific demand equations along with first order conditions from stores' profit maximization. In stores' profit maximization, we account for three sources of conjectural variation: within a store but across brands, across stores for the same brand, and across stores for other brands. Data on U.S. retail store price and sales data on cheese products from ACNielsen Homescan database are used in our empirical analysis. A set of indices representing concentration of purchases across brands within each store and across stores for each brand are used to estimate conjectural elasticities. Results show the existence of price markups suggesting imperfectly competitive behavior in retail cheese markets.

Keywords: brand and store concentration; conjectural variation; store competition

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