Gasoline Pricing, Taxation and Asymmetry: The Case of Turkey
This study analyzes the role of tax policy in gasoline prices in Turkey by utilizing time series techniques. It provides and compares empirical results by using daily gasoline prices between January 2005 and July 2012, with and without the effect of taxation. Our results, based on the standard asymmetric error-correction model, indicate no evidence of asymmetry in retail gasoline prices, which implies that the government does not benefit from the adjustment of gasoline prices through taxation. However, one can miss the big picture in gasoline pricing by concentrating only on the short term price adjustment dynamics via error-correction models. Therefore, we analyzed the long-run relationships between crude oil and gasoline prices with and without taxes. The results indicate that Turkish government succeeded at implicitly imposing an exceptionally high tax burden on gasoline (about 70%) over the longer term by adjusting non-salient excise tax amounts on gasoline and benefited from the resultant tax revenues as means of public finance.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: Hoşdere Cad. 24/4, TR-Çankaya, Ankara|
Phone: (+90 312) 468 25 89
Fax: (+90 312) 468 25 99
Web page: http://www.tek.org.tr/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Al-Gudhea, Salim & Kenc, Turalay & Dibooglu, Sel, 2007. "Do retail gasoline prices rise more readily than they fall?: A threshold cointegration approach," Journal of Economics and Business, Elsevier, vol. 59(6), pages 560-574.
- Grasso, Margherita & Manera, Matteo, 2007.
"Asymmetric error correction models for the oil-gasoline price relationship,"
Elsevier, vol. 35(1), pages 156-177, January.
- Matteo Manera & Margherita Grasso, 2005. "Asymmetric Error Correction Models for the Oil-Gasoline Price Relationship," Working Papers 2005.75, Fondazione Eni Enrico Mattei.
- C. emre Alper & Orhan Torul, 2009. "Asymmetric adjustment of retail gasoline prices in turkey to world crude oil price changes: the role of taxes," Economics Bulletin, AccessEcon, vol. 29(2), pages 775-787.
- Looney, Adam & Kroft, Kory & Chetty, Raj, 2009.
"Salience and Taxation: Theory and Evidence,"
9748525, Harvard University Department of Economics.
- Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and taxation: theory and evidence," Finance and Economics Discussion Series 2009-11, Board of Governors of the Federal Reserve System (U.S.).
- Raj Chetty & Adam Looney & Kory Kroft, 2007. "Salience and Taxation: Theory and Evidence," NBER Working Papers 13330, National Bureau of Economic Research, Inc.
- Bacon, Robert W., 1991. "Rockets and feathers: the asymmetric speed of adjustment of UK retail gasoline prices to cost changes," Energy Economics, Elsevier, vol. 13(3), pages 211-218, July.
- Geweke, John F, 1978. "Temporal Aggregation in the Multiple Regression Model," Econometrica, Econometric Society, vol. 46(3), pages 643-61, May.
- Lance J. Bachmeier & James M. Griffin, 2003.
"New Evidence on Asymmetric Gasoline Price Responses,"
The Review of Economics and Statistics,
MIT Press, vol. 85(3), pages 772-776, August.
- Lance J. Bachmeier & James M. Griffin, . "New Evidence on Asymmetric Gasoline Price Responses," Working Papers 0208, East Carolina University, Department of Economics.
- Meyer, Jochen & von Cramon-Taubadel, Stephan, 2002.
"Asymmetric Price Transmission: A Survey,"
2002 International Congress, August 28-31, 2002, Zaragoza, Spain
24822, European Association of Agricultural Economists.
- Granger, C W J & Lee, T H, 1989. "Investigation of Production, Sales and Inventory Relationships Using Multicointegration and Non-symmetric Error Correction Models," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 4(S), pages S145-59, Supplemen.
When requesting a correction, please mention this item's handle: RePEc:tek:wpaper:2013/7. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ercan Uygur)
If references are entirely missing, you can add them using this form.