Competitive Behavior in the U.S. Green Skin Avocado Market

Abstract

This study examined imperfect competition in international fruit markets. We conducted an empirical exercise to assess the intensity of competition in the US green skin avocado import market during the 2004 to 2013 period. A model using the (inverse) residual demand method as proposed by Goldberg and Knetter (1999) was specified and estimated. Findings reveal the existence of imperfect competition in the US green skin avocado market over the sample period. Estimation results show that the Dominican Republic, acting as an exporter exercises market power and maintains its marketing margin throughout the year.