A Benefit-Function Approach to Studying Market Power: An Application to the U.S. Yogurt Market

By: Hovhannisyan, Vardges; Bozic, Marin
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Hovhannisyan, Vardges; Bozic, Marin, A Benefit-Function Approach to Studying Market Power: An Application to the U.S. Yogurt Market, Journal of Agricultural and Resource Economics, Volume 38, Issue 2, August 2013, Pages 159-173

This article provides a structural framework for studying the market performance of various food industries. It revisits the benefit-function approach to modeling demand and extends its application to the empirical industrial-organization literature. We illustrate the empirical value of our model in an econometric analysis of competitive conditions in the retail market for branded yogurt. The results show that retailers are engaged in imperfect competition. Furthermore, national brand yogurt remains an important tool for retail profitability.