Retail Gasoline Price Dynamics And Local Market Power
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Retail Gasoline Price Dynamics And Local Market Power
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Author : George Deltas
language : en
Publisher:
Release Date : 2008
Retail Gasoline Price Dynamics And Local Market Power written by George Deltas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.
Using monthly data from the 48 contiguous states (except Nevada) for the 1988-2002 period, it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases. Moreover, markets with high average retail-wholesale margins experience a slower adjustment and a more asymmetric response. Since gasoline is the only variable input, average margins in a state likely reflect the degree of retail market power. This suggests that sticky prices and response asymmetries in the gasoline market are, at least partially, a consequence of retail market power.
Asymmetries In Retail Gasoline Price Dynamics And Local Market Power
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Author : George Deltas
language : en
Publisher:
Release Date : 2007
Asymmetries In Retail Gasoline Price Dynamics And Local Market Power written by George Deltas and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
Using monthly data from the 48 contiguous states (except Nevada) for the 1988-2002 period, it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases. Moreover, markets with high average retail-wholesale margins experience a slower adjustment and a higher degree of asymmetry. These results are robust to whether or not an error correction term is used, and to a number of other specifications. Since gasoline is the only variable input, one could reasonably assume that average margins in a state reflect the degree of market power at the retail level. This suggests that sticky prices and response asymmetries in the gasoline market are, at least partially, a consequence of retail market power, raising the possibility that slow price adjustments and asymmetric price responses could be used as an indicator of potential departure from perfect competition. It is also shown that out-of-sample forecasts based on asymmetric models yield substantially better predictions for the path of retail prices than forecasts based on the symmetric models. This result is robust to different measures of forecast accuracy. The higher accuracy of the out-of-sample forecasts based on asymmetric models indicates that these asymmetries are not just an outcome of fitting to a particular sample but represent the underlying data generating process.
Price Response Asymmetry And Spatial Differentiation In Local Retail Gasoline Markets
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Author : Jeremy A. Verlinda
language : en
Publisher: BiblioGov
Release Date : 2013-06
Price Response Asymmetry And Spatial Differentiation In Local Retail Gasoline Markets written by Jeremy A. Verlinda and has been published by BiblioGov this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-06 with categories.
This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which spatial differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, bundling and advertising, operation type, and local market features and demographics each influence a station's predicted price-response asymmetry.
Price Response Asymmetry And Spatial Differentiation In Local Retail Gasoline Markets
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Author : Jeremy A. Verlinda
language : en
Publisher:
Release Date : 2007
Price Response Asymmetry And Spatial Differentiation In Local Retail Gasoline Markets written by Jeremy A. Verlinda and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Gasoline categories.
Essays On Information Competition And Pricing Dynamics In The Retail Gasoline Market
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Author : Woo-Hyung Hong
language : en
Publisher:
Release Date : 2015
Essays On Information Competition And Pricing Dynamics In The Retail Gasoline Market written by Woo-Hyung Hong and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
This dissertation studies the role of information in market performance, and pricing dynamics observed in the retail gasoline market. In Chapter 1, we empirically test whether smartphones, as information-providing devices, can improve market performance and reduce price dispersion. We treat the introduction of smartphones in the Korean gasoline market as a natural experiment to investigate the impact of smartphones on competition among gas stations. Smartphones provided consumers with direct access to price information through OPINET, a government-sponsored Internet website. Our results indicate that the adoption of smartphones is associated with dramatic decreases in price dispersion and average price-cost margins, thereby creating consumer gains. Additionally, we found a sudden decline in entries and a slow increase in exits after the introduction of smartphones. Chapter 2 investigates how and why a link between market power and asymmetric pricing occurs. Exploiting unique island panel data from the Korean gasoline market, we propose geographical separation as a reliable measure of market power. Our findings confirm a positive correlation between market power and price-response asymmetry. We provide direct evidence of tacit collusion by investigating sticky pricing behaviors and suggest that the tacit collusion is the main channel through which market power influences asymmetric pricing. Additionally, we examine the effect of station heterogeneity on asymmetric pricing to provide further evidence of tacit collusion even in relatively competitive environments.
Price Uncertainty And Market Power In Retail Gasoline
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Author : Federico Rossi
language : en
Publisher:
Release Date : 2020
Price Uncertainty And Market Power In Retail Gasoline written by Federico Rossi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2020 with categories.
We quantify the effect of consumers' price uncertainty on gasoline prices and margins on an Italian highway. We observe the change in prices triggered by a longitudinal policy-based change in consumers' price information from one in which drivers on the highway had no information on the prices of stations they encountered to one that allows consumers to observe the prices of four upcoming stations on a single price sign by the side of the highway. Using these data, we estimate a model of consumer search and purchase behavior and a corresponding model of gas station pricing. We then measure the impact of varying degrees of price information on equilibrium prices, including (i) no price information, (ii) the current policy and (iii) full price information. We also compare the current policy with an alternative policy in which stations' prices are advertised with individual price signs. We find that when consumers do not have price information, gas stations are able to charge 31% more, in terms of higher price-cost margins, than when prices are known. Our welfare analysis suggests that price information is worth 57 euro cents to consumers every time they take the highway. Relative to the current mandatory policy, advertising price on individual signs is worth 19 euro cents more to consumers.
Dynamic Fuel Price Pass Through
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Author : Mr.Kangni R Kpodar
language : en
Publisher: International Monetary Fund
Release Date : 2017-01-18
Dynamic Fuel Price Pass Through written by Mr.Kangni R Kpodar and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017-01-18 with Business & Economics categories.
This paper assesses the dynamic pass-through of crude oil price shocks to retail fuel prices using a novel database on monthly retail fuel prices for 162 countries. The impulse response functions suggest that on average, a one cent increase in crude oil prices per liter translates into a 1.2 cent increase in the retail gasoline price at peak level six months after the shock. However, the estimates vary significantly across country groups, ranging from about 0.5 cent in MENA countries to two cents in advanced economies. The results also show that positive oil price shocks have a larger impact than negative price shocks on the retail gasoline price. Finally, the paper underscores the importance of the new dataset in refining estimates of the fiscal cost of incomplete pass-through.
Gasoline Price Changes The Dynamic Of Supply Demand And Competition
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Author :
language : en
Publisher: DIANE Publishing
Release Date : 2005
Gasoline Price Changes The Dynamic Of Supply Demand And Competition written by and has been published by DIANE Publishing this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Gasoline categories.
Retail And Wholesale Gasoline Price Adjustments In Response To Oil Price Changes
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Author : Donald Bumpass
language : en
Publisher:
Release Date : 2015
Retail And Wholesale Gasoline Price Adjustments In Response To Oil Price Changes written by Donald Bumpass and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
This research examines the long-run relationship between the spot oil price and retail and wholesale gasoline prices. Recent research suggests that the response of the retail gasoline price is faster and the size of the change is larger, in magnitude, following a crude oil price increase compared with periods when the crude oil price is falling; however, some recent papers examining potential asymmetries present mixed results. Our results from a common threshold model estimating the adjustment of gasoline prices and the spot oil price suggest a long-run relationship between retail and wholesale gasoline prices and the crude oil price. Further, results here suggest that both retail and wholesale gasoline prices respond symmetrically to an oil price shock in the long run, indicating little market power by gas stations and wholesalers.
Do Rockets Rise Faster And Feathers Fall Slower In An Atmosphere Of Local Market Power Evidence From The Retail Gasoline Market
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Author : Jeremy A. Verlinda
language : en
Publisher:
Release Date : 2007
Do Rockets Rise Faster And Feathers Fall Slower In An Atmosphere Of Local Market Power Evidence From The Retail Gasoline Market written by Jeremy A. Verlinda and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with categories.
This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which geographic and product differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, and local market features and demographics each influence a station's predicted price-response asymmetry. Web Appendix available at: http://ssrn.com/abstract=1000964.