Spatial differentiation and price discrimination in the cement industry: evidence from a structural model

• 成果类型: Article
• 署名作者: Miller, Nathan H.; Osborne, Matthew
• 署名单位: Georgetown University; University of Toronto
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12049
• 发表日期: 2014
• 页码: 221-247
• 关键词: MARKET-STRUCTURE; retail markets; COMPETITION; oligopoly; CHOICE; POWER

摘要

We estimate a structural model of the cement industry that incorporates spatial differentiation and price discrimination, focusing on the US Southwest over 1983-2003. We leverage the structure of the model to obtain consistent estimates of the underlying parameters using data on market outcomes that are substantially aggregated. Our results indicate that transportation costs around $0.46 per tonne-mile rationalize the data. This friction enables relatively isolated plants to obtain higher prices from nearby customers. We further find that disallowing price discrimination would create $30 million in consumer surplus annually and show how the model can identify suitable divestitures in merger analysis.