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An empirical analysis of gasoline price convergence for 20 OECD countries

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  • Bentzen, Jan

    ()
    (Department of Economics, Aarhus School of Business)

Abstract

Two decades have passed now since the oil price shocks of the 1970s and since then energy prices have - apart from short periods of price instability - evolved relatively smoothly in the industrialized countries. Energy taxes in many countries differ markedly thereby causing differences in final energy prices, but as similar tax levels are becoming more common, e.g. in the European Union, convergence concerning energy prices might be expected to appear. In the present paper national gasoline price data covering the time period since the 1970s for a sample of OECD countries are used in order to test for this often addressed topic of convergence. The empirical part of the paper applies different time series based tests of convergence, where gasoline prices exhibit convergence for most OECD-Europe countries in the case where US$ is used for measurement of the energy prices indicating a convergence or tax harmonization process is taking place for these countries.

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Bibliographic Info

Paper provided by University of Aarhus, Aarhus School of Business, Department of Economics in its series Working Papers with number 03-19.

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Length: 27 pages
Date of creation: 28 Jan 2003
Date of revision:
Handle: RePEc:hhs:aareco:2003_019

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Postal: The Aarhus School of Business, Prismet, Silkeborgvej 2, DK 8000 Aarhus C, Denmark
Phone: +45 89 486396
Fax: +45 8615 5175
Web page: http://www.asb.dk/departments/nat.aspx
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Keywords: Gasoline prices; Price convergence; Gasoline tax harmonization;

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References

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  1. Bernard, A.B. & Durlauf, S.N., 1993. "Convergence in International Output," Working papers 93-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Bernard, A.B. & Durlauf, S.N., 1994. "Interpreting Tests of the Convergence Hypothesis," Working papers 9401r, Wisconsin Madison - Social Systems.
  3. Serletis, Apostolos & Herbert, John, 1999. "The message in North American energy prices," Energy Economics, Elsevier, vol. 21(5), pages 471-483, October.
  4. Miriam Camarero & Vicente Esteve & Cecilio Tamarit, 2000. "Price convergence of peripheral European countries on the way to the EMU: A time series approach," Empirical Economics, Springer, vol. 25(1), pages 149-168.
  5. Sala-i-Martin, Xavier, 1995. "The Classical Approach to Convergence Analysis," CEPR Discussion Papers 1254, C.E.P.R. Discussion Papers.
  6. Carlino, Gerald & Mills, Leonard, 1996. "Are U.S. regional incomes converging? Reply," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 599-601, December.
  7. Serletis, Apostolos & Kemp, Todd, 1998. "The cyclical behavior of monthly NYMEX energy prices," Energy Economics, Elsevier, vol. 20(3), pages 265-271, June.
  8. Greasley, David & Oxley, Les, 1997. "Time-series based tests of the convergence hypothesis: Some positive results," Economics Letters, Elsevier, vol. 56(2), pages 143-147, October.
  9. Loewy, Michael B. & Papell, David H., 1996. "Are U.S. regional incomes converging? Some further evidence," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 587-598, December.
  10. Li, Qing & Papell, David, 1999. "Convergence of international output Time series evidence for 16 OECD countries," International Review of Economics & Finance, Elsevier, vol. 8(3), pages 267-280, September.
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Cited by:
  1. Hengyun Ma & Les Oxley & John Gibson, 2009. "Testing for Energy Market Integration in China," Working Papers 09_03, Motu Economic and Public Policy Research.
  2. Axel Dreher & Tim Krieger, 2007. "Diesel price convergence and mineral oil taxation in Europe," Working Papers CIE 5, University of Paderborn, CIE Center for International Economics.
  3. Gluschenko, Konstantin, 2011. "Price convergence and market integration in Russia," Regional Science and Urban Economics, Elsevier, vol. 41(2), pages 160-172, March.
  4. Axel Dreher & Tim Krieger, 2005. "Do gasoline prices converge in a unified Europe with non-harmonized tax rates?," KOF Working papers 05-114, KOF Swiss Economic Institute, ETH Zurich.
  5. 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.
  6. Bilgili, Faik, 2010. "Energy tax harmonization in EU: Time series and panel data evidence," MPRA Paper 24013, University Library of Munich, Germany.
  7. repec:pdn:wpaper:5 is not listed on IDEAS

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