Market Power Analysis of Soybean Commodity In East Java

Abstract

The purpose of this study is to analyze the market power of soybean price. Data used in this research was the statistic data of Time series (1989-2008). Data was estimated by using OLS (Ordinary Least Square). Before estimating the data, the stationary condition of every variable was tested by using ADF Test (Augmented Dickey-Fuller Test). The results found that market power significantly affects soybean price, value of conjectural elasticity 0.39162. Market power can increase the price of processed soybean products amounted to 38.8161 percent in output markets and increase the wholesale price of soybean 19.3981 in the input market. Soybean prices are set by government policy to encourage the local soybean production increased from farmers and to the development of soybean industry, need to consider the influence of market power on soybean price.