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Measuring the Intensity of Competition in the Japanese Beef Market

Published online by Cambridge University Press:  28 April 2015

Michael R. Reed  and
Sayed H. Saghaian
Michael R. Reed
Affiliation:
Department of Agricultural Economics, University of Kentucky, Lexington, KY
Sayed H. Saghaian
Affiliation:
Department of Agricultural Economics, University of Kentucky, Agricultural Economics Faculty of Agriculture, Food, and Natural Resources, University of Sydney, Sydney, Australia
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Abstract

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.

Keywords

beefJapanmarket powermarket shareresidual demandF12L13Q17
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 36 , Issue 1 , April 2004 , pp. 113 - 121
Copyright
Copyright © Southern Agricultural Economics Association 2004

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