Measuring Market Efficiency and Welfare Loss

14 Pages Posted: 26 Apr 2014

See all articles by Wagner A. Kamakura

Wagner A. Kamakura

Rice University

Brian T. Ratchford

University of Texas at Dallas

Jagdish Agrawal

California State University, East Bay

Date Written: 1988

Abstract

This study presents a general methodology capable of addressing a number of fundamental questions in consumer policy. Are consumers paying more than the minimum price for a given bundle of attributes? If so, what brands cost more than the consumer needs to pay? What would be the degree of improvement in the consumer's well being if some intervention sets the price of such inefficient brands at the efficient level? We apply the methodology to data on automobiles and several other goods and analyze the determinants of efficiency.

Suggested Citation

Kamakura, Wagner A. and Ratchford, Brian T. and Agrawal, Jagdish, Measuring Market Efficiency and Welfare Loss (1988). Journal of Consumer Research, Vol. 15, No. 3, 1988, Available at SSRN: https://ssrn.com/abstract=2428825

Wagner A. Kamakura (Contact Author)

Rice University ( email )

6100 South Main Street
P.O. Box 1892
Houston, TX 77005-1892
United States
(713) 348-6307 (Phone)

Brian T. Ratchford

University of Texas at Dallas ( email )

2601 North Floyd Road
Richardson, TX 75083
United States

Jagdish Agrawal

California State University, East Bay ( email )

25800 Carlos Bee Boulevard
Hayward, CA California 94542
United States

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