Document Type

Article

Publication Date

4-1-2018

Abstract

Waves of mergers and acquisitions has left the brewery industry in the United States considerably concentrated. The top two firms, Anheuser-Busch InBev and MillerCoors control more than 60% of the market share. It has become very important to assess the level of competition within the industry. The Panzar-Rosse model is an assessment of competitive conduct that has been widely used to study the competitiveness of the banking industry. The associated measure of competition, called the H-statistic, is obtained as the sum of elasticities of gross revenue with respect to input prices. For this study, the Panzar-Rosse model will be applied to the United States brewery industry and finds that the H-statistic has a negative value, meaning the industry operates under a neoclassical monopolist style or a collusive oligopoly.

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