Inequality and market concentration, when shareholding is more skewed than consumption
Date
2019
Authors
Gans, Joshua S
Leigh, Andrew
Schmalz, Martin
Triggs, Adam
Journal Title
Journal ISSN
Volume Title
Publisher
Oxford University Press
Abstract
Economic theory suggests that monopoly prices hurt consumers but benefit shareholders.
But in a world where individuals or households can be both consumers and shareholders, the impact
of market power on inequality depends in part on the relative distribution of consumption and corporate
equity ownership across individuals or households. The paper calculates this distribution for
the United States, using data from the Survey of Consumer Finances and the Consumer Expenditure
Survey, spanning nearly three decades from 1989 to 2016. In 2016, the top 20 per cent consumed approximately
as much as the bottom 60 per cent, but had 15 times as much corporate equity. Because
ownership is more skewed than consumption, increased mark-ups increase inequality. Moreover, over
time, corporate equity has become even more skewed relative to consumption.
Description
Keywords
monopoly, market power, inequality
Citation
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Source
Oxford Review of Economic Policy
Type
Journal article
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Restricted until
2099-12-31
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