A Business-Consumer Imbalance. Analysis of Market Power and Consumption-Specific Price Markups in Germany

A Business-Consumer Imbalance. Analysis of Market Power and Consumption-Specific Price Markups in Germany

The (academic) debate on price markups (as indicators of market power) points in a clear direction: average price markups, and thus market power of firms, are increasing - with consequences for productivity, innovation, and consumers. If consumers are indeed the focus of the investigation, then price markups are to be weighted according to their relevance for consumption. This approach allows for a targeted representation of the general macroeconomic developments. The aim of this project was to calculate and document such "consumer price markups" to see whether the concern about higher price markups is really relevant for consumers. The results for Germany suggest that consumers are indeed exposed to higher price markups than the overall economy, with a consistent trend. These differences are income-dependent, with lower-income (retiree) households in particular being exposed to higher price markups. The results are a first indication that current developments in the market environment (with an increase in market power and corporate concentration) may also play a role in the development of social and economic inequality.

Project members

Bernhard Ganglmair

Bernhard Ganglmair

Coordinator
Leitung Nachwuchsforschungsgruppe

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Ilona Tsanko

Ilona Tsanko

Researcher

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Alexander Kann

Alexander Kann

Researcher

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Contact

Head of Junior Research Group, Prof. Dr. Bernhard Ganglmair
Telefon +49 (0)621 1235-304