Estimating Price- Cost Margins and Scale Economies from a Panel of Microdata

Arbeitspapier

Hall's (1988) approach to study price- cost margins is adapted to simultaneously estimate price- cost margins and scale economies from a panel of plant level data. The paper shows how this methodology provides a very flexible framework with only a few, economically interesting parameters to be estimated. The econometric model is tested and estimated on different panels of plants, covering most manufacturing industries in Norway 1980- 90. The GMM- estimates suggest significant, but quite small, markups in all industries. No industry exhibits increasing returns to scale; the average firm (in all industries) seems to face constant or moderately decreasing returns to scale. Estimates suggest that there is more variation in the price- cost margins and scale coefficients within the fairly narrow industry groups investigated, as compared to between the industry groups.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Papers ; No. 130

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: General ; Single Equation Models; Single Variables: Panel Data Models; Spatio-temporal Models
• Subject: Market power ; scale economies ; GMM ; specification testing ; establishment data

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Klette, Tor Jakob
• Event: Veröffentlichung
• (who): Statistics Norway, Research Department
• (where): Oslo
• (when): 1994

Further information

• Handle: http://hdl.handle.net/10419/192114
• Last update: 10.03.2025, 11:44 AM CET