Efficiencies brewed: Pricing and consolidation in the US beer industry

Orley C. Ashenfelter, Daniel S. Hosken, Matthew C. Weinberg

Research output: Contribution to journalArticle

23 Scopus citations

Abstract

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.

Original languageEnglish (US)
Pages (from-to)328-361
Number of pages34
JournalRAND Journal of Economics
Volume46
Issue number2
DOIs
StatePublished - Jun 1 2015

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

Fingerprint Dive into the research topics of 'Efficiencies brewed: Pricing and consolidation in the US beer industry'. Together they form a unique fingerprint.

  • Cite this