Abstracts Category : Other

Gouging in the Midwest? An Analysis of the PropaneMarket

by Brandon Miller

The Midwestern United States in the winter of 2013-14experienced a 42% increase in the real price of propane from theprevious years winter. I explore whether this increase may havebeen partially attributable to firms opportunistically exporting toJapan. After developing a novel theoretical competitive model ofsupply, I use instrumental variables to estimate supply and demandfor the Midwestern propane market using annual data. I then performa residual analysis that suggests that competitive market factorsare most likely the cause of the increase in prices. I repeat thisanalysis with a more granular data set under a differentidentification strategy. Further residual analysis predicts thatthe Midwest did experience a propane reduction in the winter of2013-14 of about 16%; however, this could have been caused byeither opportunistic market power or long-term energycontracts.Advisors/Committee Members: Brock, James (Advisor), Moul, Charles (Advisor).