Review of Industrial Organization 20: 183–185, 2002.
© 2002 Kluwer Academic Publishers. Printed in the Netherlands.
News from the Monopoly Front: Changes in
Industrial Concentration, 1992–1997
FREDERIC L. PRYOR
Emeritus Professor of Economics, Swarthmore College, Swarthmore, PA 19081, U.S.A.
Abstract. Comparing concentration ratios between 1992 and 1997 raises difﬁculties because the
1997 data are arranged according to a new industrial nomenclature. By comparing concentration ra-
tios in industries where the deﬁnition did not change, it is possible to make comparisons of changes in
concentration between the two years and to document the considerable changes in industrial structure
in the manufacturing and retail sectors.
Key words: Industrial concentration, mergers, monopoly.
JEL Classiﬁcations: L10, L13, L12.
The good news is that the Census Bureau has ﬁnally published the concentration
ratios for 1997 for a broad spectrum of American industries so that the results
of the merger boom during the 1990s can be analyzed. But this is accompanied
by three pieces of bad news: (1) The 1997 data are presented according to the
North American Industrial Classiﬁcation System (NAICS), rather than the more
familiar Standard Industrial Classiﬁcation (SIC) which are used for the 1992 data.
(2) The Census Bureau does not now provide statistics on concentration ratios for
the same year using both the old and new nomenclatures, nor do they plan to
provide such bridge statistics in the immediate future. (3) The rough estimates
presented below suggest that in the manufacturing and the retail trade sectors,
industrial concentration showed a considerable increase.
In order to compare the 1992 and 1997 measures of industrial structure, I
employ the following three-step procedure:
1. Using a concordance between NAICS and SIC
(http://www.census.gov/epcd/ec97brdg/) I selected those industries whose
deﬁnitions did not change in the two systems, arranging each of these by their
1992 SIC number. In some industrial branches the nomenclature (other than the
numbers) did not greatly change; in other branches, however, a large number
of industries were redeﬁned.
2. From a Census website (http://www.census.gov/epcd/www/concentration.html)
I drew data for the two years and calculated weighted concentration ratios for
the various 3-digit industries. This required the assumption that industrial