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Regional finance and competition policy: the Canary Islands petrol market

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  • Juan Luis Jimenez
  • Jordi Perdiguero

Abstract

Market competition levels affect all agents of an economy: businesses, consumers and the State. Traditional analysis has evaluated the State's effects on the other agents, but no analysis has been conducted regarding the inverse relationship. Thus, the aim of this study is to estimate the tributary income losses that low levels of competition in the retail petrol market could cause in it, using the data from Canary Islands Autonomous Community. First, we will use Parker and Roller's methodology (1997) to measure the level of competition and confirm a deficiency. Then, using estimated rates, we will determine the differences that would appear in tributary income if the market were to behave as a Cournot's model. Our results show that the lack of competition causes a substantial loss of tributary income for this region, somewhere between 5and 10% of the real income from the tax on unleaded petrol for the year 2004.

Suggested Citation

  • Juan Luis Jimenez & Jordi Perdiguero, 2010. "Regional finance and competition policy: the Canary Islands petrol market," Applied Economics, Taylor & Francis Journals, vol. 42(10), pages 1245-1255.
    • Handle: RePEc:taf:applec:v:42:y:2010:i:10:p:1245-1255
    DOI: 10.1080/00036840701721224
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    Cited by:

    1. G. Yakubovsky S. & Г. Якубовский С., 2014. "Топливно-Энергетический Комплекс Испании: Тенденции Развития, Основные Проблемы И Пути Их Решения // Spanisn Energy Sector: Trends, Main Problems And Solutions," Финансы: теория и практика/Finance: Theory and Practice // Finance: Theory and Practice, ФГОБУВО Финансовый университет при Правительстве Российской Федерации // Financial University under The Government of Russian Federation, issue 5, pages 106-117.

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