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Econometric Methods in Staples

21 Pages Posted: 9 Jul 2004  

Orley Ashenfelter

Princeton University - Industrial Relations Section; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

David Ashmore

Princeton University

Jonathan B. Baker

American University - Washington College of Law

Suzanne Gleason

Trinity College - Department of Economics

Daniel S. Hosken

Government of the United States of America - Federal Trade Commission

Date Written: April 9, 2004

Abstract

Econometrics played a major role in the investigation and litigation of the Federal Trade Commission's successful challenge to the proposed merger between two office superstore chains, Staples and Office Depot. Our goal in writing this essay is to describe the econometric issues at stake in evaluating the FTC's central claim that the price charged by office supply superstores was related to the number and identity of superstore firms participating in the market. Similar statistical models were relied upon by the FTC and the merging firms to analyze pricing. Our discussion of these models highlights the advantages and disadvantages of alternative approaches to analyzing a panel data set: cross-sectional estimates versus fixed effects estimates. We also describe and evaluate modeling choices that appeared to have substantial influence on the empirical results.

JEL Classification: K22, L40, L81, C24

Suggested Citation

Ashenfelter, Orley and Ashmore, David and Baker, Jonathan B. and Gleason, Suzanne and Hosken, Daniel S., Econometric Methods in Staples (April 9, 2004). Princeton Law & Public Affairs Paper No. 04-007. Available at SSRN: https://ssrn.com/abstract=529144 or http://dx.doi.org/10.2139/ssrn.529144

Orley C. Ashenfelter

Princeton University - Industrial Relations Section ( email )

Princeton, NJ 08544-2098
United States
609-258-4040 (Phone)
609-258-2907 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

David Ashmore

Princeton University ( email )

Princeton, NJ 08544-1021
United States
609-683-4222 (Phone)
609-683-4239 (Fax)

Jonathan B. Baker (Contact Author)

American University - Washington College of Law ( email )

4300 Nebraska Avenue, NW
Washington, DC 20016
United States
202-274-4315 (Phone)

Suzanne Gleason

Trinity College - Department of Economics ( email )

300 Summit Street
Hartford, CT 06106
United States

Daniel S. Hosken

Government of the United States of America - Federal Trade Commission ( email )

600 Pennsylvania Ave., NW
Washington, DC 20580
United States

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