Hostname: page-component-78c5997874-g7gxr Total loading time: 0 Render date: 2024-11-13T04:13:44.361Z Has data issue: false hasContentIssue false
  • English
  • Français

Assessing Time-Varying Oligopoly and Oligopsony Power in the U.S. Paper Industry

Published online by Cambridge University Press:  26 January 2015

Bin Mei  and
Changyou Sun
Bin Mei
Affiliation:
Warnell School of Forestry and Natural Resources, University of Georgia, Athens, GA
Changyou Sun
Affiliation:
Department of Forestry, Mississippi State University, Mississippi State, MS
Get access Rights & Permissions [Opens in a new window]

Abstract

The U.S. paper industry has become increasingly concentrated and therefore been suspected of imperfect competition. In this study, the new empirical industrial organization approach is employed to measure the degree of oligopoly and oligopsony power in the U.S. paper industry simultaneously. The model is estimated by iterative three-stage least squares using annual data from 1955 to 2003. The results reveal that there has been significant oligopoly and oligopsony power in the U.S. paper industry, and the oligopoly power has been consistently lower than the oligopsony power.

Keywords

market powerNEIOthree-stage least squarestime-varying parametersL13Q23
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 40 , Issue 3 , December 2008 , pp. 927 - 939
Copyright
Copyright © Southern Agricultural Economics Association 2008

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Adams, D.M., Haynes, R.W., and Daigneault, A.J. Estimated Timber Harvest by U.S. Region and Ownership, 1950-2002. Portland, OR: U.S. Department of Agriculture, Forest Service, Gen. Tech. Rep. PNW-GTR-659, 2006.CrossRefGoogle Scholar
Adams, D.M., Jackson, K.C., and Haynes, R.W. Production, Consumption, and Prices of Softwood Products in North America: Regional Time Series Data, 1950 to 1985. Portland, OR: U.S. Department of Agriculture, Forest Service, Resource Bulletin PNW-RB-151, 1988.CrossRefGoogle Scholar
Alston, J.M., Sexton, R.J., and Zhang, M. “The Effects of Imperfect Competition on the Size and Distribution of Research Benefits.” American Journal of Agricultural Economics 79(November 1997):1252-65.Google Scholar
Appelbaum, E. “The Estimation of the Degree of Oligopoly Power.” Journal of Econometrics 19(August 1982):287-99.CrossRefGoogle Scholar
Asinas, E.R. “Exploring the Market Behavior of the U.S. Forest Products Industry.” Ph.D. dissertation. Texas A&M University, December 2001.Google Scholar
Azzam, A.M., and Pagoulatos, E. “Testing Oligopolistic and Oligopsonistic Behavior: An Application to the U.S. Meat-Packing Industry.” Journal of Agricultural Economics 41 (September 1990):362-70.Google Scholar
Bergman, M.A., and Brannlund, R. “Measuring Oligopsony Power: An Application to the Swedish Pulp and Paper Industry.” Review of Industrial Organization 10(June 1995):307-21.CrossRefGoogle Scholar
Bergman, M.A., and Nilsson, M. “Imports of Pulpwood and Price Discrimination: A Test of Buying Power in the Swedish Pulpwood Market.” Journal of Forest Economics 5(1999):365–88.Google Scholar
Berndt, E.R. The Practice of Econometrics: Classic and Contemporary. Reading, MA: Addison-Wesley, 1996.Google Scholar
Bernstein, J.I. “Price Margins and Capital Adjustment: Canadian Mill Products and Pulp and Paper Industries.” International Journal of Industrial Organization 10(September 1992): 491–510.CrossRefGoogle Scholar
Bhuyan, S., and Lopez, R.A. “Oligopoly Power in the Food and Tobacco Industries.” American Journal of Agricultural Economics 79(August 1997):1035-43.Google Scholar
Bresnahan, T.F. “Empirical Studies of Industries with Market Power.” Handbook of Industrial Organization vol. 2, Schmalensee, R. and Willig, R. eds. Amsterdam: North-Holland, 1989.Google Scholar
Bureau of Economic Analysis. U.S. Economic Accounts. Internet site: http://www.bea.gov (Accessed July 10, 2007).Google Scholar
Christensen, L.R., Jorgenson, D.W., and Lau, L.J. “Transcendental Logarithmic Production Frontiers.” Review of Economics and Statistics 55(February 1973):28–45.Google Scholar
Digal, L.N., and Ahmadi-Esfahani, F.Z. “Market Power Analysis in the Retail Food Industry: A Survey of Methods.” The Australian Journal of Agricultural and Resource Economics 46(December 2002):559-84.Google Scholar
Gomez, I.A. “Inventories, Expectations, and Environmental Effects on Industry Structure: Three Essays on Pulpwood and Sawtimber Markets.” Ph.D. dissertation. Texas A&M University, May 1997.Google Scholar
Greene, W.H. Econometric Analysis, 5th ed. Engelwood Cliffs, NJ: Prentice Hall, 2003.Google Scholar
Guo, Z., Sun., C., and Grebner, D.L. “Utilization of Forest Derived Biomass for Energy Production in the U.S.A.: Status, Challenges, and Public Policies.” International Forestry Review 9(2007): 748-58.Google Scholar
Haynes, R.W. An Analysis of the Timber Situation in the United States: 1952-2050. Portland, OR: U.S. Department of Agriculture, Forest Service, Gen. Tech. Rep. PNW-GTR-560, 2003.Google Scholar
Hervani, A.A. “Can Oligopsony Power Be Measured? The Case of U.S. Old Newspapers Market.” Resources, Conservation and Recycling 44(July 2005):343-80.Google Scholar
Howard, J.L. U.S. Timber Production, Trade, Consumption, and Price Statistics 1965-2002. Madison, WI: U.S. Department of Agriculture, Forest Service, Res. Pap. FPL-RP-615, 2003.Google Scholar
Ince, P.J. “Global Cycle Changes the Rules for U.S. Pulp and Paper.” PIMA's North American Papermaker 81(1999):37–42.Google Scholar
Internal Revenue Service. Corporation Source Book of Statistics of Income. Internet site: http://www.irs.gov/taxstats (Accessed July 10, 2007).Google Scholar
Kinnucan, H.W. “Optimal Generic Advertising in an Imperfectly Competitive Food Industry with Variable Proportions.” Agricultural Economics 29(October 2003): 143-58.Google Scholar
Mei, B., and Sun, C. “Event Analysis of the Impact of Mergers and Acquisitions on the Financial Performance of the U.S. Forest Products Industry.” Forest Policy and Economics 10(April 2008):286-94.Google Scholar
Murray, B.C. “Measuring Oligopsony Power with Shadow Prices: U.S. Markets for Pulpwood and Sawlogs.” Review of Economics and Statistics 77(August 1995):486-98.Google Scholar
National Agricultural Statistics Service. Agricultural Statistics. Washington, DC: U.S. Department of Agriculture, 1951-2005.Google Scholar
Newman, D.H. “An Econometric Analysis of the Southern Softwood Stumpage Market: 19501980.” Forest Science 33(August 1987):932-45.Google Scholar
Newman, D.H., and Wear, D.N. “Production Economics of Private Forestry: A Comparison of Industrial and Nonindustrial Forest Owners.” American Journal of Agricultural Economics 75(August 1993):674-84.Google Scholar
Norris, F. Timber Mart-South. Highlands, NC: Timber Mart-South, Inc., 2006.Google Scholar
Ronnila, M., and Toppinen, A. “Testing for Oligopsony Power in the Finnish Wood Market.” Journal of Forest Economics 6(2000):7–22.Google Scholar
Schroeter, J.R. “Estimating the Degree of Market Power in the Beef Packing Industry.” Review of Economics and Statistics 70(February 1988): 158-62.Google Scholar
Schroeter, J., and Azzam, A. “Marketing Margins, Market Power, and Price Uncertainty.” American Journal of Agricultural Economics 73(November 1991):990-9.Google Scholar
Sexton, R.J. “Industrialization and Consolidation in the U.S. Food Sector: Implications for Competition and Welfare.” American Journal of Agricultural Economics 82(December 2000): 1087-104.Google Scholar
Stordal, S., and Baardsen, S. “Estimating Price Taking Behavior with Mill-Level Data: The Norwegian Sawlog Market 1974-1991.” Canadian Journal of Forest Research 32(March 2002):401-11.Google Scholar
Sun, C. “Welfare Effects of Forestry Best Management Practices in the United States.” Canadian Journal of Forest Research 36(July 2006): 1674-83.CrossRefGoogle Scholar
United States Census Bureau. Census of Manufactures and Annual Survey of Manufactures. Internet site: http://www.census.gov/prod/www/abs/manu-min.html (Accessed July 10, 2007a).Google Scholar
United States Census Bureau. Statistical Abstracts. Internet site: http://www.census.gov/prod/www/abs/statab.html (Accessed July 10, 2007b).Google Scholar
Wann, J.J., and Sexton, R.J. “Imperfect Competition in Multiproduct Food Industries with Application to Pear Processing.” American Journal of Agricultural Economics 74(November 1992):980-90.CrossRefGoogle Scholar
Wear, D.N., Carter, D.R., and Prestemon, J. The U.S. South's Timber Sector in 2005. Asheville, NC., U.S. Department of Agriculture, Forest Service, Gen. Tech. Rep. SRS-99, 2007.Google Scholar
Yerger, D.B. “Testing for Market Power in Multi-Product Industries across Multiple Export Markets.” Southern Economic Journal 62(October 1996):938-56.Google Scholar
Zhang, M., and Sexton, R.J. “Optimal Commodity Promotion When Downstream Markets Are Imperfectly Competitive.” American Journal of Agricultural Economics 84(May 2002):352-65.Google Scholar