Markets Ready-strongMixedstrong Concrete.pdfVIP

Markets Ready-Mixed Concrete Chad Syverson Chad Syverson is Associate Professor of Economics, University of Chicago, Chicago, Illinois, and Faculty Research Fellow, National Bureau of Economic Research, Cambridge, Massachusetts. His e-mail address is syverson@ This feature explores the operation of individual markets. Patterns of behavior in markets for specific goods and services offer lessons about the determinants and effects of supply and demand, market structure, strategic behavior, and government regulation. Suggestions for future columns and comments on past ones should be sent to James R. Hines Jr., c/o Journal of Economic Perspectives, Department of Economics, University of Michigan, 611 Tappan Street, Ann Arbor, MI 48109-1220. Introduction Concrete’s natural color is gray. Its favored uses are utilitarian. Its very ubiquity causes it to blend into the background. But ready-mix concrete does have one remarkable characteristic: other than manufactured ice, perhaps no other manufacturing industry faces greater transport barriers. The transportation problem arises because ready-mix concrete both has a low value-to-weight ratio and is highly perishable—it absolutely must be discharged from the truck before it hardens. These transportation barriers mean ready-mixed concrete must be produced near its customers. For the same reason, foreign trade in ready-mixed concrete is essentially nonexistent. This article is an introduction to the basics of the market for ready-mix concrete, focusing mainly on its consumers and its producers in the United States, but with occasional comparisons to other countries when contrasts are useful. A good place to start is to clear up some confusions that I constantly encounter. First, cement and concrete are not the same thing, even though the two terms are often used interchangeably in conversation. Concrete comprises the roads we drive on and the buildings in which we li