The relationship between price and retail concentration: evidence from the US food industry
Abstract
This study utilises the product barcode, store and retail real estate data to obtain consistent estimates of the effects of retail market concentration on food prices in the USA. Our disaggregated data allow for an identification strategy that corrects for the endogeneity of concentration in the concentration–price relationship. Findings from an instrumental variables fixed-effects model indicate that prices rise with retail concentration, and that ignoring endogeneity results in a severe downward bias. A simulation analysis finds that a 5 per cent increase in concentration would increase prices by 18 per cent and decrease food consumption by 2–5 per cent. Our findings suggest mergers in the food industry could inadvertently lead to adverse effects.
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Even in the absence of evidence of explicit collusion, heightened corporate concentration can lead to harmful outcomes, such as higher food prices.
“Even in the absence of evidence of explicit collusion, some studies suggest that heightened corporate concentration can lead to harmful outcomes, such as higher food prices (Hovhannisyan et al. 2019; Roberts 2023).”
From Corporate concentration and power matter for agency in food systems (2025) · cites this paper as Hovhannisyan et al. 2019
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Corporate concentration and power matter for agency in food systems
Clapp, J., Vriezen, R., Laila, A., Conti, C., Gordon, L., Hicks, C., & Rao, N. (2025) · Food Policy · doi:10.1016/j.foodpol.2025.102897 · Cited by 64 · see citing works
- Authors
- Hovhannisyan, V., Cho, C., & Bozic, M.
- Affiliations
- University of Wyoming (US)
- United States Department of Agriculture (US)
- University of Minnesota—Twin Cities, Saint Paul, MN, USA
- Corresponding author
- Hovhannisyan, Vardges
- Venue
- European Review of Agricultural Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2018-08-21
- Volume
- 46
- Issue
- 2
- Pages
- 319-345
- ISSN
- 0165-1587 (ISSN-L)
- 1464-3618
- OpenAlex
- W2888478781
- Cited by
- 19
- References
- 43
- Citations by year
- 2026: 2 · 2025: 1 · 2024: 2 · 2022: 6 · 2021: 5 · 2020: 2 · 2019: 1
- FWCI
- 3.05
- Type
- journal article
- Language
- en
- Open access
- closed
- Licence
- academic.oup.com/journals/pages/open_access/funder_policies/chorus/standard_publication_model (vor)
- Locations
- European Review of Agricultural Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economics of Agriculture and Food Markets
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Social Sciences › Business, Management and Accounting › Marketing › Consumer Market Behavior and Pricing
- Keywords
- retail market concentration, food prices, dietary intake, retail real estate, price transmission
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