Michigan Gasoline Pricing and the Marathon - Ashland and Ultramar Diamond Shamrock Transaction

FTC Bureau of Economics Working Paper No. 278

Posted: 9 Aug 2005

See all articles by Christopher T. Taylor

Christopher T. Taylor

U.S. Federal Trade Commission - Bureau of Economics

John Simpson

Federal Trade Commission

Date Written: July 2005

Abstract

Marathon-Ashland Petroleum's (MAP) 1999 acquisition of the Michigan assets of Ultramar Diamond Shamrock (UDS) increased MAP's share of terminal storage in Michigan from about 16 percent to about 25 percent and increased the share of gasoline stations bearing a MAP brand from about 16 percent to about 24 percent. In this paper, we examine whether this acquisition affected the retail price of gasoline. We use a difference-in-differences model to compare price movements in six Michigan cities affected by the acquisition with price movements in two nearby cities unaffected by the acquisition. Using this model, we find no evidence that this acquisition led to higher prices for consumers.

Keywords: Merger retrospective, petroleum industry

JEL Classification: L1, L41, L71

Suggested Citation

Taylor, Christopher T. and Simpson, John, Michigan Gasoline Pricing and the Marathon - Ashland and Ultramar Diamond Shamrock Transaction (July 2005). FTC Bureau of Economics Working Paper No. 278, Available at SSRN: https://ssrn.com/abstract=771489 or http://dx.doi.org/10.2139/ssrn.771489

Christopher T. Taylor (Contact Author)

U.S. Federal Trade Commission - Bureau of Economics ( email )

601 Pennsylvania Avenue, NW
Antitrust Division
Washington, DC 20580
United States

John Simpson

Federal Trade Commission ( email )

601 Pennsylvania Avenue, NW
Washington, DC 20580
United States

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