Demand fluctuations in the ready-mix concrete industry


Journal Article

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.

Full Text

Duke Authors

Cited Authors

  • Collard-Wexler, A

Published Date

  • May 1, 2013

Published In

Volume / Issue

  • 81 / 3

Start / End Page

  • 1003 - 1037

Electronic International Standard Serial Number (EISSN)

  • 1468-0262

International Standard Serial Number (ISSN)

  • 0012-9682

Digital Object Identifier (DOI)

  • 10.3982/ECTA6877

Citation Source

  • Scopus