TY - JOUR
T1 - Efficiencies brewed
T2 - Pricing and consolidation in the US beer industry
AU - Ashenfelter, Orley C.
AU - Hosken, Daniel S.
AU - Weinberg, Matthew C.
N1 - Publisher Copyright:
© 2015, RAND.
PY - 2015/6/1
Y1 - 2015/6/1
N2 - Merger efficiencies provide the primary justification for why mergers of competitors may benefit consumers. Surprisingly, there is little evidence that efficiencies can offset incentives to raise prices following mergers. We estimate the effects of increased concentration and efficiencies on pricing by using panel scanner data and geographic variation in how the merger of the brewers Miller and Coors was expected to increase concentration and reduce costs. All else equal, the average predicted increase in concentration led to price increases of 2%, but at the mean this was offset by a nearly equal and opposite efficiency effect.
AB - Merger efficiencies provide the primary justification for why mergers of competitors may benefit consumers. Surprisingly, there is little evidence that efficiencies can offset incentives to raise prices following mergers. We estimate the effects of increased concentration and efficiencies on pricing by using panel scanner data and geographic variation in how the merger of the brewers Miller and Coors was expected to increase concentration and reduce costs. All else equal, the average predicted increase in concentration led to price increases of 2%, but at the mean this was offset by a nearly equal and opposite efficiency effect.
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U2 - 10.1111/1756-2171.12092
DO - 10.1111/1756-2171.12092
M3 - Article
AN - SCOPUS:84928172982
SN - 0741-6261
VL - 46
SP - 328
EP - 361
JO - RAND Journal of Economics
JF - RAND Journal of Economics
IS - 2
ER -