Abstract
This paper focuses on the sources of intra‐industry price variability in US food industries during a period of increasing concentration, while accounting for the impact of variations in prices of primary agricultural products. Results suggest that intra‐industry price variability in food industries increases with their respective mean rate of inflation and product heterogeneity. However, industrial concentration lowers the sensitivity of relative prices to changes in the mean rate of inflation. Hence, static welfare losses to consumers from increasing concentration in food industries, a subject of recent and intensive investigation, can partly be offset by gains such as reduced price variability.
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