Market Power and Spatial Competition in Rural India
研究印度限制农民跨州销售的法律如何影响中间商的市场力量，发现增加空间竞争可使农民售价提高6.4%，取消限制后平均价格和产量将分别增长至少11%和7%。
Abstract Market power of intermediaries contributes to the low incomes of farmers in India. I study the role of spatial competition between intermediaries in determining the prices that farmers receive in India by focusing on a law that restricts farmers to selling their goods to intermediaries in their own state. I show that the discontinuities in market power generated by the law translate into discontinuities in prices. Increasing spatial competition by one standard deviation causes prices received by farmers to increase by 6.4%. I propose and estimate a quantitative spatial model of bargaining and trade to shed light on spatial and aggregate implications. Estimates from the structural model suggest that removing the interstate trade restriction in India would increase competition between intermediaries. Thereby average farmer prices and their output would increase by at least 11% and 7%, respectively. The value of the national crop output would increase by at least 18%. However, there are distributional consequences as well, as some farmers stand to lose due to increased local production.