Modelling the terminal gate prices of unleaded petrol in Australia
AbstractThis paper examines whether or not unleaded petrol prices (at Australia's 18 wholesale distribution terminals) respond asymmetrically to changes in the exchange rate and the Singapore petrol prices (known as MOPS95). It is found that the exchange rate is the most significant source of asymmetric behaviour in 10 terminals. In other words, following a depreciation of $A, prices significantly rise more than when the exchange rate appreciates. The results indicate that terminal gate prices do not respond asymmetrically to changes in MOPS95 with the only 3 exceptions being Cairns, Devonport and Perth. There are also 8 terminals in which prices are significantly stickier downwards than upwards, suggesting that price increases are passed onto retailers faster than price decreases.
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Bibliographic InfoArticle provided by Elsevier in its journal Economic Modelling.
Volume (Year): 33 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/inca/30411
Wholesale; Petrol prices; Australia; Asymmetric adjustment;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
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