American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
The High and Falling Price of Cement in Africa
American Economic Journal: Applied Economics
vol. 17,
no. 2, April 2025
(pp. 1–40)
Abstract
Prices for several intermediate inputs, including cement, are higher in developing economies—particularly in Africa. Combining recent data from the International Comparison Program with a global directory of cement firms, we estimate an industry equilibrium model to distinguish between drivers of international price dispersion: demand, costs, conduct, and entry. Developing economies feature both higher marginal costs and higher markups. African markets are not characterized by less competitive conduct and, if anything, feature lower barriers to entry. Yet the small size of many national markets limits entry and competition and explains most of the higher markups and prices. Policy implications are discussed.Citation
Leone, Fabrizio, Rocco Macchiavello, and Tristan Reed. 2025. "The High and Falling Price of Cement in Africa." American Economic Journal: Applied Economics 17 (2): 1–40. DOI: 10.1257/app.20230352Additional Materials
JEL Classification
- D24 Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- L13 Oligopoly and Other Imperfect Markets
- L61 Metals and Metal Products; Cement; Glass; Ceramics
- O14 Industrialization; Manufacturing and Service Industries; Choice of Technology