Competition and price asymmetries in the Greek oil sector: an empirical analysis on gasoline market
AbstractThis article attempts to investigate the issue of asymmetries in the transmission of shocks to input prices and exchange rate onto the wholesale and retail price of gasoline respectively. For this purpose, we utilise the error-correction methodology in the Greek gasoline market. The sample consists of monthly data covering the period of January 1988 to June 2006. We also try to analyse by using impulse response functions the effect of competition on the dynamic adjustment of gasoline price to which has been paid scant attention in the past. The results favour the common perception that retail gasoline prices respond asymmetrically to cost increases and decreases both in the long and the short-run. At the wholesale segment, there is a symmetric response of the spot prices of gasoline towards the adjustment to the short-run responses of the exchange rate. Lastly, after the deregulation, wholesale prices of gasoline tend to gradually restore equilibrium triggered by a price shock compared to the regulated period. Copyright The Author(s) 2012
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Springer in its journal Empirical Economics.
Volume (Year): 43 (2012)
Issue (Month): 2 (October)
Contact details of provider:
Postal: Stumpergasse 56, A-1060 Vienna
Phone: ++43 - (0)1 - 599 91 - 0
Fax: ++43 - (0)1 - 599 91 - 555
Web page: http://link.springer.de/link/service/journals/00181/index.htm
More information through EDIRC
Find related papers by JEL classification:
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Severin Borenstein, 1991. "Selling Costs and Switching Costs: Explaining Retail Gasoline Margins," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 354-369, Autumn.
- Godby, Rob & Lintner, Anastasia M. & Stengos, Thanasis & Wandschneider, Bo, 2000.
"Testing for asymmetric pricing in the Canadian retail gasoline market,"
Elsevier, vol. 22(3), pages 349-368, June.
- Godby, R. & Stengos, T. & Wandsschneider, B., 1997. "Testing for Asymmetric Pricing in the Canadian Retail Gasoline Market," Working Papers 1997-4, University of Guelph, Department of Economics and Finance.
- Grasso, Margherita & Manera, Matteo, 2007.
"Asymmetric error correction models for the oil-gasoline price relationship,"
Elsevier, vol. 35(1), pages 156-177, January.
- Matteo Manera & Margherita Grasso, 2005. "Asymmetric Error Correction Models for the Oil-Gasoline Price Relationship," Working Papers 2005.75, Fondazione Eni Enrico Mattei.
- Matteo Manera & Giliola Frey, 2005.
"Econometric Models of Asymmetric Price Transmission,"
2005.100, Fondazione Eni Enrico Mattei.
- Giliola Frey & Matteo Manera, 2007. "Econometric Models Of Asymmetric Price Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 21(2), pages 349-415, 04.
- Stock, James H & Watson, Mark W, 1993.
"A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems,"
Econometric Society, vol. 61(4), pages 783-820, July.
- Tom Doan, . "SWDOLS: RATS procedure to estimate cointegrating vectors using dynamic OLS," Statistical Software Components RTS00207, Boston College Department of Economics.
- James H. Stock & Mark W. Watson, 1991. "A simple estimator of cointegrating vectors in higher order integrated systems," Working Paper Series, Macroeconomic Issues 91-3, Federal Reserve Bank of Chicago.
- Duffy-Deno, Kevin T., 1996. "Retail price asymmetries in local gasoline markets," Energy Economics, Elsevier, vol. 18(1-2), pages 81-92, April.
- M. Galeotti & A. Lanza & M. Manera, 2001.
"Rockets and feathers revisited: an international comparison on European gasoline markets,"
Working Paper CRENoS
200112, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
- 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.
- Radchenko, Stanislav, 2005.
"Oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases,"
Elsevier, vol. 27(5), pages 708-730, September.
- Stanislav Radchenko, 2004. "Oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases," Industrial Organization 0408001, EconWPA.
- 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, August.
- 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.
- Severin Borenstein & A. Colin Cameron, 1992. "Do Gasoline Prices Respond Asymmetrically to Crude Oil Price Changes?," NBER Working Papers 4138, National Bureau of Economic Research, Inc.
- Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-72, June.
- 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.
- Sam Peltzman, 2000.
"Prices Rise Faster than They Fall,"
Journal of Political Economy,
University of Chicago Press, vol. 108(3), pages 466-502, June.
- Sam Peltzman, 1998. "Prices Rise Faster Than They Fall," University of Chicago - George G. Stigler Center for Study of Economy and State 142, Chicago - Center for Study of Economy and State.
- Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
- Bacon, Robert W., 1991. "Rockets and feathers: the asymmetric speed of adjustment of UK retail gasoline prices to cost changes," Energy Economics, Elsevier, vol. 13(3), pages 211-218, July.
- Stock, James H, 1987. "Asymptotic Properties of Least Squares Estimators of Cointegrating Vectors," Econometrica, Econometric Society, vol. 55(5), pages 1035-56, September.
- Barry Reilly & Robert Witt, 1996.
"Petrol Price Asymmetries Revisited,"
Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS)
89, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
- Ronald Johnson, 2002. "Search Costs, Lags and Prices at the Pump," Review of Industrial Organization, Springer, vol. 20(1), pages 33-50, February.
- Kaufmann, Robert K. & Laskowski, Cheryl, 2005. "Causes for an asymmetric relation between the price of crude oil and refined petroleum products," Energy Policy, Elsevier, vol. 33(12), pages 1587-1596, August.
- Polemis, Michael L. & Fotis, Panagiotis N., 2013. "Do gasoline prices respond asymmetrically in the euro zone area? Evidence from cointegrated panel data analysis," Energy Policy, Elsevier, vol. 56(C), pages 425-433.
- Polemis, Michail & Fotis, Panagiotis, 2011. "The gasoline Industry in European Union and the USA," MPRA Paper 35097, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F Baum).
If references are entirely missing, you can add them using this form.