A structured approach to assessing market concentration and competition in the aggregate sector: Insights from Israel

This study presents a structured methodology for assessing market concentration in the aggregates sector, using Israel as a case to illustrate how spatial, institutional, and ownership dynamics interact to shape competitive outcomes. It analyzes how geographic constraints, vertical integration, and regulatory policies shape competition and pricing dynamics in the non-energy extractive sector. Drawing on a unique transaction-level dataset, the findings reveal substantial market concentration reinforced by quarry ownership patterns and high transportation costs, particularly in regions with limited supplier access. Cross-ownership between quarries and downstream concrete plants further restricts competition, as integrated firms prioritize internal supply even when it entails higher logistics costs. The study identifies structural inefficiencies and regional disparities that weaken competitive pressures and increase costs in the construction supply chain. Policy recommendations include expanding quarry supply, revising tender procedures, and divesting cross-owned quarries to foster competition. Beyond Israel, the framework may be replicable in other contexts where comparable spatial, ownership, and transaction-level data exist, but its applicability is contingent on the availability of such data and regulatory conditions. The study contributes to resource policy by offering tools for improving competition, enhancing efficiency, and guiding sustainable development in mineral-based industries.