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

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Author Info
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

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File URL: http://hdl.handle.net/10.1007/s11293-005-3761-2
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Publisher Info
Article provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.

Volume (Year): 33 (2005)
Issue (Month): 2 (June)
Pages: 179-192
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Handle: RePEc:kap:atlecj:v:33:y:2005:i:2:p:179-192

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Keywords: Q400; C50;

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  2. Galeotti, Marzio & Lanza, Alessandro & Manera, Matteo, 2003. "Rockets and feathers revisited: an international comparison on European gasoline markets," Energy Economics, Elsevier, vol. 25(2), pages 175-190, March. [Downloadable!] (restricted)
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  3. Abdulai, Awudu, 2002. "Using Threshold Cointegration to Estimate Asymmetric Price Transmission in the Swiss Pork Market," Applied Economics, Taylor and Francis Journals, vol. 34(6), pages 679-87, April. [Downloadable!] (restricted)
  4. Bettendorf, Leon & van der Geest, Stephanie A. & Varkevisser, Marco, 2003. "Price asymmetry in the Dutch retail gasoline market," Energy Economics, Elsevier, vol. 25(6), pages 669-689, November. [Downloadable!] (restricted)
  5. Duffy-Deno, Kevin T., 1996. "Retail price asymmetries in local gasoline markets," Energy Economics, Elsevier, vol. 18(1-2), pages 81-92, April. [Downloadable!] (restricted)
  6. Sen, Anindya, 2003. "Higher prices at Canadian gas pumps: international crude oil prices or local market concentration? An empirical investigation," Energy Economics, Elsevier, vol. 25(3), pages 269-288, May. [Downloadable!] (restricted)
  7. Godby, Rob & Lintner, Anastasia M. & Stengos, Thanasis & Wandschneider, Bo, 2000. "Testing for asymmetric pricing in the Canadian retail gasoline market," Energy Economics, Elsevier, vol. 22(3), pages 349-368, June. [Downloadable!] (restricted)
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  8. Matt Lewis, 2004. "Asymmetric Price Adjustment and Consumer Search: An Examination of the Retail Gasoline Market," Industrial Organization 0407010, EconWPA. [Downloadable!]
  9. Enders, Walter & Granger, Clive W J, 1998. "Unit-Root Tests and Asymmetric Adjustment with an Example Using the Term Structure of Interest Rates," Journal of Business & Economic Statistics, American Statistical Association, vol. 16(3), pages 304-11, July.
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  10. Lance J. Bachmeier & James M. Griffin, 2003. "New Evidence on Asymmetric Gasoline Price Responses," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 772-776, 05. [Downloadable!] (restricted)
  11. Asplund, Marcus & Eriksson, Rickard & Friberg, Richard, 2000. " Price Adjustments by a Gasoline Retail Chain," Scandinavian Journal of Economics, Blackwell Publishing, vol. 102(1), pages 101-21, March. [Downloadable!] (restricted)
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  12. Borenstein, Severin & Cameron, A Colin & Gilbert, Richard, 1997. "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?," The Quarterly Journal of Economics, MIT Press, vol. 112(1), pages 305-39, February.
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