ADVERTISING, CONCENTRATION AND PROFITABILITY IN MANUFACTURING

This paper predicts an inverted-LI relationship between concentration and advertising only for oligopolistic industries facing relatively less elastic demand curves. It rejects the inverted-LI theory based on the hypothesis that the large firms collude and lends empirical support to the idea that causation runs from Concentration to advertising intensity. By confirming that the effect of advertising on profitability is significant and greater for industries producing homogeneous goods than for those producing heterogeneous goods, this study fails to support the barriers-to-entry hypothesis.     

Making MEPA-IEP work: tools for professionals

The Multiethnic Placement Act of 1994 and the Interethnic Adoption Provisions of 1996 (MEPA-IEP) require states to develop plans that "provide for the diligent recruitment of potential foster and adoptive families that reflect the ethnic and racial diversity of children in the state for whom foster and adoptive homes are needed." This paper explores the background of MEPA-IEP, describes the disparate outcomes for minority children in the child welfare system, and identifies agency challenges in finding permanent families for African American children. Tools are provided for successfully recruiting families while following MEPA-IEP and avoiding potentially discriminatory practices in placement decisionmaking.     

DYNAMIC GAINS AND STATIC LOSSES IN OLIGOPOLY: EVIDENCE FROM THE BEER INDUSTRY

The paper provides a new perspective on the estimate of the welfare losses due to oligopoly. I argue that the conventional analysis of monopoly/oligopoly welfare losses can be misleading. If causation runs from investment in new technology to increased concentration, dynamic gains from innovation should be taken into account for a fuller analysis of welfare losses. I use beer-industry data to demonstrate that technological changes Granger-cause beer prices, and beer prices Granger-cause the Herfindahl index. I then estimate the dynamic gains to consumers in the beer industry and find these gains to be impressive relative to conventional static losses. ( JEL L10, L13)