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Demand fluctuations in the ready-mix concrete industry

Publication ,  Journal Article
Collard-Wexler, A
Published in: Econometrica
May 1, 2013

I investigate the role of demand shocks in the ready-mix concrete industry. Using Census data on more than 15,000 plants, I estimate a model of investment and entry in oligopolistic markets. These estimates are used to simulate the effect of eliminating short-term local demand changes. A policy of smoothing the volatility of demand has a market expansion effect: The model predicts a 39% increase in the number of plants in the industry. Since bigger markets have both more plants and larger plants, a demand-smoothing fiscal policy would increase the share of large plants by 20%. Finally, the policy of smoothing demand reduces entry and exit by 25%, but has no effect on the rate at which firms change their size. © 2013 The Econometric Society.

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Published In

Econometrica

DOI

EISSN

1468-0262

ISSN

0012-9682

Publication Date

May 1, 2013

Volume

81

Issue

3

Start / End Page

1003 / 1037

Related Subject Headings

  • Econometrics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 1403 Econometrics
  • 1402 Applied Economics
  • 1401 Economic Theory
 

Citation

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Collard-Wexler, A. (2013). Demand fluctuations in the ready-mix concrete industry. Econometrica, 81(3), 1003–1037. https://doi.org/10.3982/ECTA6877
Collard-Wexler, A. “Demand fluctuations in the ready-mix concrete industry.” Econometrica 81, no. 3 (May 1, 2013): 1003–37. https://doi.org/10.3982/ECTA6877.
Collard-Wexler A. Demand fluctuations in the ready-mix concrete industry. Econometrica. 2013 May 1;81(3):1003–37.
Collard-Wexler, A. “Demand fluctuations in the ready-mix concrete industry.” Econometrica, vol. 81, no. 3, May 2013, pp. 1003–37. Scopus, doi:10.3982/ECTA6877.
Collard-Wexler A. Demand fluctuations in the ready-mix concrete industry. Econometrica. 2013 May 1;81(3):1003–1037.
Journal cover image

Published In

Econometrica

DOI

EISSN

1468-0262

ISSN

0012-9682

Publication Date

May 1, 2013

Volume

81

Issue

3

Start / End Page

1003 / 1037

Related Subject Headings

  • Econometrics
  • 3803 Economic theory
  • 3802 Econometrics
  • 3801 Applied economics
  • 1403 Econometrics
  • 1402 Applied Economics
  • 1401 Economic Theory