The demand for Brazilian steel and the loss of well-being caused by the exercise of market power in the period from 2006 to 2008

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Janderson Damaceno dos Reis
Márcia Azanha Ferraz Dias de Moraes
Mirian Rumenos Piedade Bacchi

Abstract

The main objective of this study is to calculate the value of the welfare loss for the Brazilian steel sector. Different relevant markets were analyzed, such as: crude steel, rolled steel and rebar. Price - elasticities of demand were obtained by estimating different demand equations for each related market. The theoretical model proposed by Daskin (1991) was used to calculate the dead weight loss in oligopolistic markets. According to the results, it can be concluded that the Brazilian steel market is highly concentrated what enables firms to exercise their market power, causing a welfare loss for the Brazilian society.

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Article Details

Section
Revista de Defesa da Concorrência
Author Biographies

Janderson Damaceno dos Reis, Universidade Federal de Viçosa

Departamento de Economia Rural / UFV - Organização Industrial e Estudos Industriais

Márcia Azanha Ferraz Dias de Moraes

Departamento de Economia, Administração e Sociologia / ESALQ-USP, Organização Industrial e Estudos Industriais.

Mirian Rumenos Piedade Bacchi

Departamento de Economia, Administração e Sociologia / ESALQ-USP, Econometria.