Working Paper: NBER ID: w13859
Authors: Orley Ashenfelter; Daniel Hosken
Abstract: In this paper we propose a method to evaluate the effectiveness of U.S. horizontal merger policy and apply it to the study of five recent consumer product mergers. We selected the mergers from those that, from the public record, seemed to be most problematic for the antitrust agencies. Thus we estimate an upper bound on the likely price effect of completed mergers. Our study employs retail scanner data and uses familiar panel data program evaluation procedures to measure price changes. Our results indicate that four of the five mergers resulted in some increases in consumer prices, while the fifth merger had little effect.
Keywords: mergers; consumer prices; antitrust policy; horizontal merger; price effects
JEL Codes: L1; L41; L66; L71; L73
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mergers (G34) | increase in consumer prices (E31) |
| four out of five mergers (G34) | increase in consumer prices (E31) |
| fifth merger (G34) | little effect on prices (D41) |
| mergers (G34) | consolidation of market power (L12) |
| mergers (G34) | reduced competition (L19) |