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FoolWatch - Further Discussion of Econometric Analysis Undertaken By ACCC

Author

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  • Harding, Don

Abstract

Using data supplied by InformedSources I find additional flaws in the ACCC analysis of FuelWatch. First, the drop in petrol prices that is so visually convincing in the ACCC chart S1 is in fact an artifact of the method of data construction and can be attributed primarily to increases in prices in Adelaide and Melbourne --- events that had nothing to do with Western Australia or FuelWatch. Second, redoing the analysis using Sydney as the point of reference and adding prices in other cities as explanatory variables lead to results that contradict ACCC findings. First I find that the two best models that I estimate yield the conclusion that Fuelwatch either increased petrol prices in Western Australia by a small amount or had no effect. Third, I find that the entry of Woolworths and Coles into the Western Australian market had the effect of reducing unleaded petrol prices Perth by about 2.67 per cent relative to Sydney.

Suggested Citation

  • Harding, Don, 2008. "FoolWatch - Further Discussion of Econometric Analysis Undertaken By ACCC," MPRA Paper 16048, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:16048
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    File URL: https://mpra.ub.uni-muenchen.de/16048/1/MPRA_paper_16048.pdf
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    References listed on IDEAS

    as
    1. Harding, Don, 2008. "FoolWatch: A Case study of econometric analysis and evidenced-based-policy making in the Australian Government," MPRA Paper 16041, University Library of Munich, Germany.
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    Cited by:

    1. Don Harding, 2008. "Fuel Watch: Evidence-Based-Policy Or Policy-Based-Evidence?," Economic Papers, The Economic Society of Australia, vol. 27(4), pages 315-328, December.

    More about this item

    Keywords

    Petrol Pricing; Fuelwatch; Econometrics and public policy; Evidence based policy;

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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