Distributional effects of competition : a simulation approach / Carlos Rodríguez-Castelán, Abdelkrim Araar, Eduardo A. Malásquez, Sergio Olivieri, Tara Vishwanath

Araar, Abdelkrim [VerfasserIn] ; Malásquez, Eduardo A. [VerfasserIn] ; Olivieri, Sergio [VerfasserIn] ; Vishwanath, Tara [VerfasserIn]

Englisch

Washington, DC, USA : World Bank Group, Poverty and Equity Global Practice, May 2019

1 Online-Ressource (circa 32 Seiten) : Illustrationen

Erscheint auch als: Druck-Ausgabe- Rodriguez Castelan, Carlos: Distributional Effects of Competition: A Simulation Approach. - Washington, D.C : The World Bank, 2019

DOI: 10.1596/1813-9450-8838

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

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