MONOPSONY POWER IN MULTIPLE INPUT MARKETS: A Nonparametric Approach

Cigarette manufacturers' monopsony power exertion in procuring domestic and imported tobacco is investigated using nonparametric methods. While it is often assumed that tobacco program rents are captured by growers, results indicate the opposite actually occurs. Cigarette manufacturers appear to exert significant monopsony power in the domestic leaf tobacco market and capture a large portion of program rents. Cigarette manufacturers appear to exert monopsony power of much smaller magnitude in the international leaf tobacco market, but with increasing magnitude in more recent years.


Issue Date:
1999
Publication Type:
Working or Discussion Paper
PURL Identifier:
http://purl.umn.edu/11656
Total Pages:
31
JEL Codes:
L1
Series Statement:
Staff Paper 99-62




 Record created 2017-04-01, last modified 2017-08-23

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