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Retail Prices of Gasoline and Asymmetric Adjustment to Wholesale Prices in Colombia

Author

Listed:
  • Carabalí , Jaime

    (Banco W, Colombia)

  • Meneses , Luis

    (Universidad Cooperativa de Colombia, Colombia)

  • Perez, Alex

    (Banco de la República, Colombia)

  • Rodriguez, Manuel

    (Consultor, Colombia)

Abstract

This study examines the pass-through between retail and wholesale prices of gasoline in Colombia. Data from 2017 to 2019 were available on prices and characteristics of gasoline sold by service stations in the main cities of Colombia. Information on the location of the stations is also available, which is used to georeference the stations and obtain the potential number of competitors for a station. The study results show an asymmetric pass-through behavior between retail and wholesale prices. Furthermore, the potential number of competitors of the stations has a direct effect on the retail prices and an indirect effect because it alters the stations’ pass-through.

Suggested Citation

  • Carabalí , Jaime & Meneses , Luis & Perez, Alex & Rodriguez, Manuel, 2022. "Retail Prices of Gasoline and Asymmetric Adjustment to Wholesale Prices in Colombia," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(3), pages 73-105, September.
    • Handle: RePEc:ris:jecdev:0011
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    References listed on IDEAS

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    More about this item

    Keywords

    Pass-Through; Asymmetric Price Adjustment; Gasoline Retail Markets;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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