Download or read book Retail Gasoline Price Dynamics and Local Market Power written by George Deltas and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using monthly data from the 48 contiguous states (except Nevada) for the 1988-2002 period, it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases. Moreover, markets with high average retail-wholesale margins experience a slower adjustment and a more asymmetric response. Since gasoline is the only variable input, average margins in a state likely reflect the degree of retail market power. This suggests that sticky prices and response asymmetries in the gasoline market are, at least partially, a consequence of retail market power.

Download or read book Asymmetries in Retail Gasoline Price Dynamics and Local Market Power written by George Deltas and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using monthly data from the 48 contiguous states (except Nevada) for the 1988-2002 period, it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases. Moreover, markets with high average retail-wholesale margins experience a slower adjustment and a higher degree of asymmetry. These results are robust to whether or not an error correction term is used, and to a number of other specifications. Since gasoline is the only variable input, one could reasonably assume that average margins in a state reflect the degree of market power at the retail level. This suggests that sticky prices and response asymmetries in the gasoline market are, at least partially, a consequence of retail market power, raising the possibility that slow price adjustments and asymmetric price responses could be used as an indicator of potential departure from perfect competition. It is also shown that out-of-sample forecasts based on asymmetric models yield substantially better predictions for the path of retail prices than forecasts based on the symmetric models. This result is robust to different measures of forecast accuracy. The higher accuracy of the out-of-sample forecasts based on asymmetric models indicates that these asymmetries are not just an outcome of fitting to a particular sample but represent the underlying data generating process.

Download or read book Price Response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets written by Jeremy A. Verlinda and published by BiblioGov. This book was released on 2013-06 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which spatial differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, bundling and advertising, operation type, and local market features and demographics each influence a station's predicted price-response asymmetry.

Download or read book Price Uncertainty and Market Power in Retail Gasoline written by Federico Rossi and published by . This book was released on 2020 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We quantify the effect of consumers' price uncertainty on gasoline prices and margins on an Italian highway. We observe the change in prices triggered by a longitudinal policy-based change in consumers' price information from one in which drivers on the highway had no information on the prices of stations they encountered to one that allows consumers to observe the prices of four upcoming stations on a single price sign by the side of the highway. Using these data, we estimate a model of consumer search and purchase behavior and a corresponding model of gas station pricing. We then measure the impact of varying degrees of price information on equilibrium prices, including (i) no price information, (ii) the current policy and (iii) full price information. We also compare the current policy with an alternative policy in which stations' prices are advertised with individual price signs. We find that when consumers do not have price information, gas stations are able to charge 31% more, in terms of higher price-cost margins, than when prices are known. Our welfare analysis suggests that price information is worth 57 euro cents to consumers every time they take the highway. Relative to the current mandatory policy, advertising price on individual signs is worth 19 euro cents more to consumers.

Download or read book Price response Asymmetry and Spatial Differentiation in Local Retail Gasoline Markets written by Jeremy A. Verlinda and published by . This book was released on 2007 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Information Competition and Pricing Dynamics in the Retail Gasoline Market written by Woo-Hyung Hong and published by . This book was released on 2015 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies the role of information in market performance, and pricing dynamics observed in the retail gasoline market. In Chapter 1, we empirically test whether smartphones, as information-providing devices, can improve market performance and reduce price dispersion. We treat the introduction of smartphones in the Korean gasoline market as a natural experiment to investigate the impact of smartphones on competition among gas stations. Smartphones provided consumers with direct access to price information through OPINET, a government-sponsored Internet website. Our results indicate that the adoption of smartphones is associated with dramatic decreases in price dispersion and average price-cost margins, thereby creating consumer gains. Additionally, we found a sudden decline in entries and a slow increase in exits after the introduction of smartphones. Chapter 2 investigates how and why a link between market power and asymmetric pricing occurs. Exploiting unique island panel data from the Korean gasoline market, we propose geographical separation as a reliable measure of market power. Our findings confirm a positive correlation between market power and price-response asymmetry. We provide direct evidence of tacit collusion by investigating sticky pricing behaviors and suggest that the tacit collusion is the main channel through which market power influences asymmetric pricing. Additionally, we examine the effect of station heterogeneity on asymmetric pricing to provide further evidence of tacit collusion even in relatively competitive environments.

Download or read book Gasoline price changes the dynamic of supply demand and competition written by and published by DIANE Publishing. This book was released on 2005 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Do Rockets Rise Faster and Feathers Fall Slower in an Atmosphere of Local Market Power Evidence from the Retail Gasoline Market written by Jeremy A. Verlinda and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study explores the possibility that local market power influences the observed asymmetric relationship between changes in wholesale gasoline costs and changes in retail gasoline prices. I exploit an original data set of weekly gas station prices in Southern California from September 2002 to May 2003, and take advantage of detailed station and local market level characteristics to determine the extent to which geographic and product differentiation influences price response asymmetry. I find that brand identity, proximity to rival stations, and local market features and demographics each influence a station's predicted price-response asymmetry. Web Appendix available at: http://ssrn.com/abstract=1000964.

Download or read book On Market Power in the Retail Gasoline Industry and Its Effect on Prices written by Nicholas Oxedine and published by . This book was released on 2004 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Retail and Wholesale Gasoline Price Adjustments in Response to Oil Price Changes written by Donald Bumpass and published by . This book was released on 2015 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: This research examines the long-run relationship between the spot oil price and retail and wholesale gasoline prices. Recent research suggests that the response of the retail gasoline price is faster and the size of the change is larger, in magnitude, following a crude oil price increase compared with periods when the crude oil price is falling; however, some recent papers examining potential asymmetries present mixed results. Our results from a common threshold model estimating the adjustment of gasoline prices and the spot oil price suggest a long-run relationship between retail and wholesale gasoline prices and the crude oil price. Further, results here suggest that both retail and wholesale gasoline prices respond symmetrically to an oil price shock in the long run, indicating little market power by gas stations and wholesalers.

Download or read book Asymmetric Dynamic Pricing in a Local Gasoline Retail Market written by Felipe Balmaceda and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Asymmetric-price adjustment is a common phenomenon in many markets around the world, particularly in retail gasoline markets. This paper studies the existence of this phenomenon in the retail gasoline market in the city of Santiago, Chile, using a data set of weekly gas station prices that covers a period of almost four years. We found that prices adjust asymmetrically, and the asymmetry is different for branded gas stations and unbranded stations. In addition, we found that the asymmetry for high-margin stations is statistically equivalent to that for low-margin stations. This evidence is suggestive of collusion as a rationale for the asymmetric pricing policy observed.

Download or read book The Distributional Implications of the Impact of Fuel Price Increases on Inflation written by Mr. Kangni R Kpodar and published by International Monetary Fund. This book was released on 2021-11-12 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the response of consumer price inflation to changes in domestic fuel prices, looking at the different categories of the overall consumer price index (CPI). We then combine household survey data with the CPI components to construct a CPI index for the poorest and richest income quintiles with the view to assess the distributional impact of the pass-through. To undertake this analysis, the paper provides an update to the Global Monthly Retail Fuel Price Database, expanding the product coverage to premium and regular fuels, the time dimension to December 2020, and the sample to 190 countries. Three key findings stand out. First, the response of inflation to gasoline price shocks is smaller, but more persistent and broad-based in developing economies than in advanced economies. Second, we show that past studies using crude oil prices instead of retail fuel prices to estimate the pass-through to inflation significantly underestimate it. Third, while the purchasing power of all households declines as fuel prices increase, the distributional impact is progressive. But the progressivity phases out within 6 months after the shock in advanced economies, whereas it persists beyond a year in developing countries.

Download or read book Dynamic Fuel Price Pass Through written by Mr.Kangni R Kpodar and published by International Monetary Fund. This book was released on 2017-01-18 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the dynamic pass-through of crude oil price shocks to retail fuel prices using a novel database on monthly retail fuel prices for 162 countries. The impulse response functions suggest that on average, a one cent increase in crude oil prices per liter translates into a 1.2 cent increase in the retail gasoline price at peak level six months after the shock. However, the estimates vary significantly across country groups, ranging from about 0.5 cent in MENA countries to two cents in advanced economies. The results also show that positive oil price shocks have a larger impact than negative price shocks on the retail gasoline price. Finally, the paper underscores the importance of the new dataset in refining estimates of the fiscal cost of incomplete pass-through.

Download or read book Anticompetitive Practices in the Retail Gasoline Market written by United States. Congress. Senate. Committee on the Judiciary. Subcommittee on Antitrust, Monopolies, and Business Rights and published by . This book was released on 1992 with total page 624 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Nature of Competition in Gasoline Distribution at the Retail Level written by Ralph Cassady and published by Univ of California Press. This book was released on 2022-09-23 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: This title is part of UC Press's Voices Revived program, which commemorates University of California Press’s mission to seek out and cultivate the brightest minds and give them voice, reach, and impact. Drawing on a backlist dating to 1893, Voices Revived makes high-quality, peer-reviewed scholarship accessible once again using print-on-demand technology. This title was originally published in 1951.

Download or read book The Role of Content Regulation on Pricing and Market Power in Regional Retail and Wholesale Gasoline Markets written by Erich J. Muehlegger and published by . This book was released on 2002 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: Since 1999, regional retail and wholesale gasoline markets in the United States have experienced significant price volatility, both intertemporally and across geographic markets. This paper focuses on one potential explanation for regional variations in price levels and volatility, gasoline content regulation. Implemented regionally to address local mobile-source emissions, gasoline content regulations increase cost to refiners, transporters and distributors of gasoline, in addition to reducing the fungibility of gasoline across different regions. This paper first provides a summary of the regional gasoline content regulations and a primer on the refining industry. In addition, this paper specifies the costs regional content regulation imposes on refiners, transporters and distributors of gasoline and the role increasing heterogeneity of gasoline may play in regional price volatility. Finally, this paper surveys the previous literature looking at the effect of gasoline content regulation on prices and price volatility and suggests directions for future research.

Download or read book Dynamic Pricing in Retail Gasoline Markets written by Severin Borenstein and published by . This book was released on 1993 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper tests for price patterns in retail gasoline markets consistent with those predicted by models of implicit collusion among firms. Recent supergame models show that the highest supportable collusive price is a function of today's profit relative to expected future profit: collusive prices are higher when predictable changes in demand or cost lead firms to expect that collusive profits are increasing rather than declining. Ceteris paribus, collusive profits will be expected to increase when demand is expected to increase and/or costs are expected to decline. Using panel data on sales volume, and retail and wholesale prices in 59 cities over 72 months, we find results consistent with these predictions. Controlling for current demand and input price, the elasticity of current retail margins with respect to expected next-month demand is about 0.37. The elasticity of current margins with respect to next-month wholesale price is about -0.37. The results are inconsistent with inventory effects.