Measuring the Intensity of Competition in the Japanese Beef Market

• Published in: Journal of agricultural and applied economics Vol. 36; no. 1; pp. 113 - 121
• Main Authors: Reed, Michael R., Saghaian, Sayed H.
• Format: Journal Article
• Language: English
• Published: New York, USA Cambridge University Press 01.04.2004
• Subjects: Accounting; Beef; chilled meats; Competition; cost analysis; Costs; demand; Demand curves; econometric models; Elasticity of demand; estimation; Exports; F12; Fiscal years; frozen meat; Investigations; Japan; L13; market power; market share; Market shares; markets; Prices; Product differentiation; Q17; residual demand; Suppliers; supply; New Zealand; Canada; Australia; United States; Japan; Japan; residual demand; F12; Q17; market share; beef; market power; L13
• ISSN: 1074-0708; 2056-7405; 1074-0708
• DOI: 10.1017/S1074070800021891

A residual demand model for beef exports to Japan is specified and estimated. The objective is to estimate the extent of market power. It is assumed that each exporting country faces a downward-sloping residual demand curve, which reflects the market demand minus the supplies of competitors, and that exporters maximize profit through their output decisions. The analysis is disaggregated by beef cut and form to capture the variation by beef market segments. The results indicate that the highest markup of price over marginal cost belongs to U.S. frozen ribs, the only indication of market power by U.S. exporters. Canada is found to have limited market power, whereas Australia and New Zealand enjoy some market power, including five chilled beef categories.