Distributional Effects of Competition : A Simulation Approach
Understanding the economic and social effects of the recent global trends of rising market concentration and market power has become a policy priority, particularly in developing countries where markets are often more concentrated. In this context,...
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/889601556800454904/Distributional-Effects-of-Competition-A-Simulation-Approach http://hdl.handle.net/10986/31603 |
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okr-10986-316032022-09-20T00:14:36Z Distributional Effects of Competition : A Simulation Approach Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Olivieri, Sergio Vishwanath, Tara POVERTY INEQUALITY MARKET CONCENTRATION INCOME DISTRIBUTION SIMULATION Understanding the economic and social effects of the recent global trends of rising market concentration and market power has become a policy priority, particularly in developing countries where markets are often more concentrated. In this context, since the poor are typically the most affected by lack of competition, new analytical tools to assess the distributional effects of variations in market concentration in a rapid and cost-efficient manner are required. To fill this knowledge gap, this paper introduces a simple simulation method, the Welfare and Competition tool (WELCOM), to estimate with minimum data requirements the direct distributional effects of market concentration through the price channel. Using this simple yet novel tool, this paper also illustrates the simulated distributional effects of reducing concentration in two markets in Mexico that are known for their high level of concentration: mobile telecommunications and corn products. The results show that increasing competition from four to 12 firms in the mobile telecommunications industry and reducing the market share of the oligopoly in corn products from 31.2 percent to 7.8 percent would achieve a combined reduction of 0.8 percentage points in the poverty headcount as well as a decline of 0.32 points in the Gini coefficient. 2019-05-02T19:00:35Z 2019-05-02T19:00:35Z 2019-05 Working Paper http://documents.worldbank.org/curated/en/889601556800454904/Distributional-Effects-of-Competition-A-Simulation-Approach http://hdl.handle.net/10986/31603 English Policy Research Working Paper;No. 8838 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean Mexico |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
POVERTY INEQUALITY MARKET CONCENTRATION INCOME DISTRIBUTION SIMULATION |
| spellingShingle |
POVERTY INEQUALITY MARKET CONCENTRATION INCOME DISTRIBUTION SIMULATION Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Olivieri, Sergio Vishwanath, Tara Distributional Effects of Competition : A Simulation Approach |
| geographic_facet |
Latin America & Caribbean Mexico |
| relation |
Policy Research Working Paper;No. 8838 |
| description |
Understanding the economic and social
effects of the recent global trends of rising market
concentration and market power has become a policy priority,
particularly in developing countries where markets are often
more concentrated. In this context, since the poor are
typically the most affected by lack of competition, new
analytical tools to assess the distributional effects of
variations in market concentration in a rapid and
cost-efficient manner are required. To fill this knowledge
gap, this paper introduces a simple simulation method, the
Welfare and Competition tool (WELCOM), to estimate with
minimum data requirements the direct distributional effects
of market concentration through the price channel. Using
this simple yet novel tool, this paper also illustrates the
simulated distributional effects of reducing concentration
in two markets in Mexico that are known for their high level
of concentration: mobile telecommunications and corn
products. The results show that increasing competition from
four to 12 firms in the mobile telecommunications industry
and reducing the market share of the oligopoly in corn
products from 31.2 percent to 7.8 percent would achieve a
combined reduction of 0.8 percentage points in the poverty
headcount as well as a decline of 0.32 points in the Gini coefficient. |
| format |
Working Paper |
| author |
Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Olivieri, Sergio Vishwanath, Tara |
| author_facet |
Rodriguez-Castelan, Carlos Araar, Abdelkrim Malasquez, Eduardo A. Olivieri, Sergio Vishwanath, Tara |
| author_sort |
Rodriguez-Castelan, Carlos |
| title |
Distributional Effects of Competition : A Simulation Approach |
| title_short |
Distributional Effects of Competition : A Simulation Approach |
| title_full |
Distributional Effects of Competition : A Simulation Approach |
| title_fullStr |
Distributional Effects of Competition : A Simulation Approach |
| title_full_unstemmed |
Distributional Effects of Competition : A Simulation Approach |
| title_sort |
distributional effects of competition : a simulation approach |
| publisher |
World Bank, Washington, DC |
| publishDate |
2019 |
| url |
http://documents.worldbank.org/curated/en/889601556800454904/Distributional-Effects-of-Competition-A-Simulation-Approach http://hdl.handle.net/10986/31603 |
| _version_ |
1764474710488252416 |