Market Delineation and Merger Simulation: A Proposed Methodology With an Application to the Argentine Biscuit Market

How firms compete when they set identical prices: Nonprice strategies in the Indian biscuit industry

“…Panel (a) of Figure 4 shows the distribution of price elasticities estimated at the segment‐region‐price point level that are statistically different from zero with a 95% probability. These estimates range mostly between −1 and −4 and are consistent with others reported in the literature for food‐related items (Coloma, 2011; DellaVigna & Gentzkow, 2019). Consumer preferences in rural areas are different from those in urban areas.…”

“…1818In Table , in Supporting Information Appendix , we show that our segment‐specific price elasticity estimates lie mostly between −0.6 (cream biscuits) and −4.9 (glucose biscuits). Our estimates are in line with those calculated using Nielsen data by Coloma (2011) for the Argentinian biscuit industry, where the aggregate elasticity is around −0.7 and varies across segments between −0.5 and −4.8.…”

“…Because we directly observe quantities in kilograms of the product sold, measurement error is less of a concern in our study.18 In TableA.11, in Supporting Information Appendix A, we show that our segment-specific price elasticity estimates lie mostly between −0.6 (cream biscuits) and −4.9 (glucose biscuits). Our estimates are in line with those calculated using Nielsen data byColoma (2011) for the Argentinian biscuit industry, where the aggregate elasticity is around −0.7 and varies across segments between −0.5 and −4.8.19 We estimate industry-level price elasticity of demand separately for urban and rural areas and report the results in TableA.10, in…”

The Effect of Horizontal Mergers on Efficiency and Market Power: An Application to the Argentine Hamburger Market

“…These are, for example, the translog demand system, originally proposed by Christensen, Jorgenson and Lau (1975), the almost ideal demand system (AIDS), created by Deaton and Muellbauer (1980), and the quadratic almost ideal demand system (QUAIDS), developed by Banks, Blundell and Lewbel (1997). 7 For a more complete explanation of these demand function transformation in the context of merger simulations, see Coloma (2011).…”