Ohio school milk markets: an analysis of bidding

We examine the institutional details of the school milk procurement process, bidding data, statements of daily executives, and supply characteristics in Ohio during the 1980s. We compare the bidding behavior of a group of firms in Cincinnati to a control group. We find that the behavior of each of the firms differs from that of the control group. We argue that the behavior of these firms is consistent with collusion. The estimated average effect of collusion on market prices is about 6.5%, or roughly the cost of shipping school milk about 50 miles.