Changes in Industry Structure and Concentration? : Welfare Loss due to Perfect Competition in the Swedish Industry for Wooden Single-Family Houses

As studies based on data from 2012 show, the Swedish market for wooden single-family houses is highly competitive, with many firms offering relatively homogeneous products or services. In order to serve the demand on that market, only 38 % of the existing firms actually were needed. Thus, an uneven distribution of resource utilization let to welfare losses. Yet since 2012, the demand on the market increased by more than 35 %, which potentially had an effect on resource utilization. This study is aiming at describing the development of the structure and concentration in the Swedish industry for wooden single-family houses, for a five year period from 2010 to 2014. This could help to understand, if and how market demand affects structure, concentration rate and consequently welfare loss due to resource utilization. The required data were collected from the annual reports of the 52 relevant firms in the industry. By means of the Herfindahl-Hirschman Index and the Herfindahl-Hershamann Number Equivalent, industry structure and concentration rate was calculated. The results will show how the industry structure and concentration rate developed from 2010 to 2015, the distribution of resource for welfare purposes and thus, how many firms there actually were needed to serve the market