Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/63923 
Year of Publication: 
2002
Series/Report no.: 
ETLA Discussion Papers No. 818
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
Aim of this paper is to estimate price-cost margin in the Finnish pharmaceutical industry. The estimation is based on the method developed by Hall (1988), who shows that, under constant returns to scale, the total factor productivity depends on the growth rate of output-capital ratio if the market is imperfectly competitive. The measurement of price-cost margin is based on this theoretical result. We utilize data on the Finnish pharmaceutical industry. The data covers the years 1975-1999 and includes information on output, labor hours and capital stock both in nominal and real terms. According to the results, the estimated price-cost margin is in the range 0.59 - 0.67, which is close to the estimates obtained in the US markets. – Pharmaceuticals ; pricing ; competition ; regulation
Document Type: 
Working Paper

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