Price regulation and relative price convergence: Evidence from the retail gasoline market in Canada
This paper explores price regulation and relative price convergence in the Canadian retail gasoline market. We use monthly data (2000–2010) on retail gasoline prices in 60 Canadian cities to investigate (i) whether the retail gasoline market in Canada has experienced a relative price convergence to the mean, which is expected, given the increased economic integration across Canadian provinces; and (ii) whether the introduction of price regulation mechanisms in New Brunswick and Nova Scotia in July 2006 had any impact on the price convergence in these provinces.
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