Data and Code for: A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases

Principal Investigator(s): View help for Principal Investigator(s) Wallace Mullin, George Washington University Department of Economics; Christopher Snyder, Dartmouth College

Version: View help for Version V1

Name	File Type	Size	Last Modified
Mullin_Snyder_cigarettes.xlsx	application/vnd.openxmlformats-officedocument.spreadsheetml.sheet	10.6 KB	12/11/2019 07:53:AM
Mullin_Snyder_cigarettes_bounds_boostrapping.do	text/x-stata-syntax	17.4 KB	12/11/2019 09:09:AM
Mullin_Snyder_evolution_figures.xlsx	application/vnd.openxmlformats-officedocument.spreadsheetml.sheet	28.2 KB	12/11/2019 06:07:AM
Mullin_Snyder_figures.pptx	application/vnd.openxmlformats-officedocument.presentationml.presentation	346.7 KB	12/07/2019 03:20:AM
Mullin_Snyder_polyethylene.xlsx	application/vnd.openxmlformats-officedocument.spreadsheetml.sheet	12.1 KB	12/07/2019 03:01:AM
Mullin_Snyder_polyethylene_biennial.do	text/x-stata-syntax	11.7 KB	12/13/2019 08:56:AM
Mullin_Snyder_polyethylene_bounds_bootstrapping.do	text/x-stata-syntax	19.1 KB	12/11/2019 06:37:AM
Mullin_Snyder_polyethylene_compare.do	text/x-stata-syntax	6.6 KB	12/11/2019 10:01:AM
Mullin_Snyder_polyethylene_curvature.do	text/x-stata-syntax	10 KB	12/11/2019 06:35:AM
Mullin_Snyder_polyethylene_leaveout.do	text/x-stata-syntax	38 KB	12/11/2019 07:49:AM

Project Citation:

Mullin, Wallace, and Snyder, Christopher. Data and Code for: A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases. Nashville, TN: American Economic Association [publisher], 2021. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2021-10-21. https://doi.org/10.3886/E116767V1

Project Description

Summary:

This data archive contains Excel data and Stata and Excel code to produce all figures and tables of statistical results from the AEJ-Micro paper by Mullin and Snyder, "A Simple Method for Bounding the Elasticity of Growing Demand with Applications to the Analysis of Historic Antitrust Cases."

The archive also contains two Stata programs that other researchers can use in their own applications to estimate elasticity bounds according to the paper's method and compute Zelterman (1993) bootstrapped standard errors. The first program assumes linear demand and the second logit demand.

Mullin and Snyder's paper provides a simple method, requiring only minimal data, for bounding demand elasticities in growing, homogeneous-product markets. Since growing demand curves cannot cross, shifts in market equilibrium over time can be used to "funnel" the demand curve into a narrow region, bounding its slope. Our featured application assesses the antitrust remedy in the 1952 DuPont decision, ordering incumbents to license patents for commercial plastics. We bound the demand elasticity significantly below 1 in many post-remedy years, inconsistent with monopoly, supporting the remedy's effectiveness. A second application investigates whether the 1911 dissolution of American Tobacco fostered competition in the cigarette market.

Scope of Project

Subject Terms: demand estimation; bounds; elasticity; antitrust; plastics; remedy; patents

JEL Classification:
      C18 Methodological Issues: General
      D22 Firm Behavior: Empirical Analysis
      L40 Antitrust Issues and Policies: General
      L65 Chemicals; Rubber; Drugs; Biotechnology; Plastics
      L66 Food; Beverages; Cosmetics; Tobacco; Wine and Spirits

Geographic Coverage: USA

Time Period(s): 1958 – 1972 (Polyethylene data); 1913 – 1928 (Cigarette data)

Collection Date(s): 2016 – 2016 (Polyethylene data collection); 2019 – 2019 (Cigarette data collection)

Universe: Market price and quantity in two U.S. industries

Data Type(s): aggregate data

Collection Notes: Data collected by authors from various historical sources as detailed in article.

Methodology

Data Source:

Polyethylene data from U.S. Tariff Commission. (various years). Synthetic Organic Chemicals: United States Production and Sales. Washington, DC: Government Printing Office.

Cigarette data comes from several sources. For quantity, we use cigarette consumption, compiled in Table 2 of the American Lung Assocation. (2011). "Trends in Tobacco Use." Chicago, IL, which in turn comes from U.S. Department of Agriculture tobacco yearbooks. Price data based on Table 55 from Tennant, Richard B. (1950). The American Cigarette Industry. New Haven, CT: Yale University
Press. We drew on the comprehensive list of price announcements for the most popular brand, Camel, obtained from testimony in the 1946 American Tobacco case. We For years experiencing price changes, we took the average weighted by number of days spent at each price. We use net wholesale price, i.e., list price including taxes less wholesale discount.

Collection Mode(s): other

Unit(s) of Observation: Industry year

Geographic Unit: Aggregate U.S.

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Published Versions

V1 [2021-10-21]

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