Journal Article

Exit from the Meatpacking Industry: A Microdata Analysis

Donald W. Anderson, Brian C. Murray, Jackqueline L. Teague and Richard C. Lindrooth

in American Journal of Agricultural Economics

Published on behalf of Agricultural and Applied Economics Association

Volume 80, issue 1, pages 96-106
Published in print February 1998 | ISSN: 0002-9092
Published online February 1998 | e-ISSN: 1467-8276 | DOI: http://dx.doi.org/10.2307/3180272
Exit from the Meatpacking Industry: A Microdata Analysis

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We model the determinants of plant exit from the cattle-slaughter industry using probit to distinguish between plant-level (e.g., age, scale, and scope) and market-level (e.g., market share, concentration, and competitive fringe) factors. Market variables are shown to be less important determinants of exit than plant-level factors, though a significant tendency for very small plants to exit already highly concentrated markets is apparent. Government actions to stem the industry's consolidation must consider the trade-off between welfare gains from the reduction of market power and welfare losses from foregone technological efficiency improvements.

Keywords: exit; meatpacking; oligopsony; regulation; welfare; L110; Q110

Journal Article.  0 words. 

Subjects: Agricultural Economics ; Market Structure, Firm Strategy, and Market Performance

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