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Synthetic control method at the pump: The Petro-Canada/Suncor merg

Author

Listed:
  • Can Erutku

    (Glendon College, York University)

  • Vincent Hildebrand

    (Glendon College, York University)

Abstract

We use the synthetic control method to measure the impact of the 2009 merger between Suncor and Petro-Canada on retail gasoline prices in Toronto. We find that the merger did not lead to a substantial lessening of competition, perhaps due to the divestiture process or from the remaining effective competition post-merger. Because the analysis is very economical in terms of data requirement, the synthetic control method may be useful in antitrust analysis and merger control, particularly in industries where products are relatively homogeneous.

Suggested Citation

  • Can Erutku & Vincent Hildebrand, 2017. "Synthetic control method at the pump: The Petro-Canada/Suncor merg," Economics Bulletin, AccessEcon, vol. 37(4), pages 2537-2544.
    • Handle: RePEc:ebl:ecbull:eb-17-00617
    as

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    References listed on IDEAS

    as
    1. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    2. Orley C. Ashenfelter & Daniel S. Hosken & Matthew C. Weinberg, 2013. "The Price Effects of a Large Merger of Manufacturers: A Case Study of Maytag-Whirlpool," American Economic Journal: Economic Policy, American Economic Association, vol. 5(1), pages 239-261, February.
    3. Justine S. Hastings, 2004. "Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California," American Economic Review, American Economic Association, vol. 94(1), pages 317-328, March.
    4. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    Full references (including those not matched with items on IDEAS)

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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