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Regional Comparisons, Spatial Aggregation, and Asymmetry of Price Pass-Through in U.S. Gasoline Markets

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  • Michael Ye
  • John Zyren
  • Joanne Shore
  • Michael Burdette

Abstract

Spot to retail price pass-through behavior of the U.S. gasoline market was investigated at the national and regional levels, using weekly wholesale and retail motor gasoline prices from January 2000 to the present. Asymmetric pass-through was found across all regions, with faster pass-through when prices are rising. Pass-through patterns, in terms of speed and time for completion, were found to vary from region to region. Spatial aggregation was investigated at the national level and the East Coast with the aggregated cumulative pass-through being greater than the volume-weighted regional pass-through when spot prices increase. These results are useful to the petroleum industry, consumers, and policy makers by providing a basis to estimate the retail price effects that result from a change in spot price. Copyright International Atlantic Economic Society 2005

Suggested Citation

  • Michael Ye & John Zyren & Joanne Shore & Michael Burdette, 2005. "Regional Comparisons, Spatial Aggregation, and Asymmetry of Price Pass-Through in U.S. Gasoline Markets," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(2), pages 179-192, June.
    • Handle: RePEc:kap:atlecj:v:33:y:2005:i:2:p:179-192
    DOI: 10.1007/s11293-005-3761-2
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    References listed on IDEAS

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    Cited by:

    1. Wlazlowski, Szymon & Giulietti, Monica & Binner, Jane & Milas, Costas, 2009. "Price dynamics in European petroleum markets," Energy Economics, Elsevier, vol. 31(1), pages 99-108, January.
    2. Meyler, Aidan, 2009. "The pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices," Energy Economics, Elsevier, vol. 31(6), pages 867-881, November.
    3. Perdiguero-García, Jordi, 2013. "Symmetric or asymmetric oil prices? A meta-analysis approach," Energy Policy, Elsevier, vol. 57(C), pages 389-397.
    4. Jordi Perdiguero-García, 2010. "“Symmetric or asymmetric gasoline prices? A metaanalysis approach”," IREA Working Papers 201013, University of Barcelona, Research Institute of Applied Economics, revised Nov 2010.
    5. Blair, Benjamin F. & Rezek, Jon P., 2008. "The effects of Hurricane Katrina on price pass-through for Gulf Coast gasoline," Economics Letters, Elsevier, vol. 98(3), pages 229-234, March.
    6. Koopmans, Carl & Lieshout, Rogier, 2016. "Airline cost changes: To what extent are they passed through to the passenger?," Journal of Air Transport Management, Elsevier, vol. 53(C), pages 1-11.
    7. Saleh Mothana Obadi & Sona Othmanov & Mariam Abdov, 2013. "What are the Causes of High Crude Oil Price? Causality Investigation," International Journal of Energy Economics and Policy, Econjournals, vol. 3(Special), pages 80-92.
    8. Blair, Benjamin F. & Campbell, Randall C. & Mixon, Phillip A., 2017. "Price pass-through in US gasoline markets," Energy Economics, Elsevier, vol. 65(C), pages 42-49.

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    Keywords

    Q400; C50;

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General

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