rockets and feathers understanding asymmetric pricing prices rise like rockets but fall like feathers this stylized fact of most markets is con rmed by many empirical studies in this paper i develop a model with competitive rms and rational partially informed consumers where such asymmetric response to costs by rms emerges naturally in contrast to public opinion and past work collusion is not necessary to explain such result using a rich dataset of retail gasoline prices i nd the observed price dispersion pattern to be consistent with the model s prediction

oil price volatility and the asymmetric response of gasoline prices to oil price increases and decreases this paper analyzes the effect of volatility in oil prices on the degree of asymmetry in the response of gasoline prices to oil price increases and decreases several time series measures of the asymmetry between the responses of gasoline prices to oil price increases and decreases and several measures of the oil price volatility are constructed in all models the degree of asymmetry in gasoline prices declines with an increase in oil price volatility the results support the oligopolistic coordination theory as a likely explanation of the observed asymmetry and are not consistent with the standard search theory and the search theory with bayesian updating

falling behind the joneses relative consumption and the growth savings paradox abstract concern for individual consumption relative to per capita consumption can induce a fear of falling behind which increases precautionary savings this fear intensifies as societal income growth increases allowing for a positive effect of growth on savings rates

market structure and price adjustment in the u s wholesale gasoline markets abstract the issue of sticky prices in u s wholesale gasoline market is re examined allowing for the effect of market structure due to increased market concentration caused by mergers acquisitions and joint ventures which started in the late 1990s in the u s oil industry i investigate the effects of market structure on the pattern of price adjustment based on the notion that increased market concentration leads to downward price stickiness and asymmetric short run price adjustment in the transmission of crude price changes to wholesale gasoline price i find that market concentration has an insignificant asymmetric effect on the speed of price adjustment but a significant asymmetric effect on short run price adjustments in the response of wholesale gasoline prices to crude price shocks in three u s wholesale markets furthermore the signs on the coefficients of market concentration effects on price dynamics in the models support the assertion that increased market concentration leads to downward price stickiness in only one of the three markets examined overall the results indicate that market structure does not have a strong effect on the dynamics of price adjustment

causes for an asymmetric relation between the price of crude oil and refined petroleum products we revisit the issue of asymmetries in the relation between the price of crude oil and refined petroleum products in the united states an econometric analysis of monthly data indicates that the asymmetric relation between the price of crude oil and motor gasoline is generated by refinery utilization rates and inventory behavior the asymmetric relation between the price of crude oil and home heating oil probably is generated by contractual arrangements between retailers and consumers together these results imply that price asymmetries may be generated by efficient markets under these conditions there is little justification for policy interventions to reduce or eliminate price asymmetries in motor gasoline and home heating oil markets

growth habit formation and catching up with the joneses when habits are introduced multiplicatively in a capital accumulation model the consumers objective function might fail to be concave in this paper we provide conditions aimed at guaranteeing the existence of interior solutions to the consumers problem we also characterize the equilibrium path of two growth models with multiplicative habits the internal habit formation model where individual habits coincide with own past consumption and the external habit formation or catching up with the joneses model where habits arise from the average past consumption in the economy we show that the introduction of external habits makes the equilibrium path inefficient during the transition towards the balanced growth path we characterize in this context the optimal tax policy

price asymmetry in the dutch retail gasoline market abstract this article analyses the retail price adjustments in the dutch gasoline market we estimate an asymmetric error correction model on weekly price changes for the years 1996 2001 we construct five datasets one for each working day the conclusions on asymmetric pricing are shown to differ over these datasets suggesting that the choice of the day for which the prices are observed matters more than commonly believed in our view the insufficient robustness of the outcomes might explain the mixed conclusions found in the literature using these two approaches we also show that the effect of asymmetry on the dutch consumer costs is negligible

oil and gas markets in the uk evidence from a cointegrating approach the paper examines the relationship between uk wholesale gas prices and the brent oil price over the period 1996 2003 in order to investigate whether oil and gas prices decoupled during this period as orthodox gas market liberalisation theory suggests tests for unit roots and cointegration are carried out and it is discovered that a long run equilibrium relationship between uk gas and oil prices exists moreover this relationship pre dates the opening of the uk mainland europe interconnector following a recursive methodology hansen h and johansen s 1999 some tests for parameter constancy in cointegrated var models econometrics journal 2 306 333 it was found that the cointegrating relationship is present throughout the sample period however the long run solutions seem to be more volatile evidence is provided that the short run relationship is linear and impulse response functions are used to examine the effects that a shock in oil would have on gas these findings do not support the assumption that gas prices and oil prices decouple

testing for asymmetric pricing in the canadian retail gasoline market abstract this paper applies a threshold regression model to test for asymmetric pricing in the retail gasoline market in canada using weekly data for the period january 1990 to december 1996 we present results for 13 canadian cities for both premium and regular gasoline within the context of an error correction model we test for the presence of asymmetric price behaviour using average changes in crude prices as well as various lags for the change in crude as possible thresholds we are unable to find any evidence to support this view

tax policy and aggregate demand management under catching up with the joneses this paper examines the role for tax policies in productivity shock driven economies with catching up with the joneses utility functions the optimal tax policy is shown to affect the economy countercyclically via procyclical taxes i e cooling down the economy with higher taxes when it is overheating in booms and stimulating the economy with lower taxes in recessions to keep consumption up thus models with catching up with the joneses utility functions call for traditional keynesian demand management policies but for rather unorthodox reasons

asymmetric error correction models for the oil gasoline price relationship abstract the existing literature on price asymmetries does not systematically investigate the sensitivity of the empirical results to the choice of a particular econometric specification this paper fills this gap by providing a detailed comparison of the three most popular models designed to describe asymmetric price behavior namely asymmetric ecm autoregressive threshold ecm and ecm with threshold cointegration each model is estimated on a common monthly data set for the gasoline markets of france germany italy spain and uk over the period 1985 2003 all models are able to capture the temporal delay in the reaction of retail prices to changes in spot gasoline and crude oil prices as well as some evidence of asymmetric behavior however the type of market and the number of countries which are characterized by asymmetric oil gasoline price relations vary across models the asymmetric ecm prescribes that long run price asymmetries are most likely to be found in the second stage of the transmission chain conversely the ecm with threshold cointegration suggests that long run price asymmetries vary across countries and markets short run price asymmetries are captured by the asymmetric ecm specification and the tar ecm the latter model suggests that all european countries are likely to be affected by asymmetries at the distribution stage while the results obtained with the asymmetric ecm are mixed

rockets and feathers the asymmetric speed of adjustment of uk retail gasoline prices to cost changes abstract the paper develops a quadratic quantity adjustment model to test the hypothesis put forward in the recent monopolies and mergers commission report that the speed of adjustment of uk retail gasoline prices to cost changes is more rapid when costs rise than when they fall and that the adjustment path is more concentrated around the mean value on the upswing using data from 1982 to 1989 evidence of faster and more concentrated responses to cost increases were found

do rockets rise faster and feathers fall slower in an atmosphere of local market power evidence from the retail gasoline market 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 influence 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

retail price cycles and response asymmetry weekly retail gasoline prices in windsor ontario from 1989 to 1994 appear to respond faster to wholesale price increases than to decreases but exhibit a cyclic pattern inconsistent with a common explanation of response asymmetry i reconcile these observations through a model of price cycles prices on the downward portion of the cycle appear insensitive to costs compared with price increases supporting the theory that price decreases result from battles over market share this pattern resembles a faster response to cost increases than to decreases and the conclusion that asymmetry indicates a role for competition policy may be inappropriate jel classification l13 l71 cycles des prix de detail et reponse asymetrique les prix de detail hebdomadaires de la gazoline a windsor ont entre 1989 et 1994 semblent reagir plus vite aux accroissements qu aux chutes des prix de gros mais suivent un pattern cyclique qui ne semble pas consistant avec l explication traditionnelle en termes de reponse asymetrique l auteur reconcilie ces observations a l aide d un modele de cycle de prix les prix dans la portion descendante du cycle semblent insensibles aux variations de couts par comparaison avec les accroissements de prix ce qui supporte la theorie que les chutes de prix resultent de luttes pour les parts de marche le pattern ressemble a celui declenche par une reponse plus rapide aux augmentations qu aux chutes de couts et la conclusion qui voudrait qu on puisse attribuer le tout a l asymetrie des reponses et que donc une intervention de la politique de la concurrence s impose peut etre inappropriee

sticky prices inventories and market power in wholesale gasoline markets a model with costly adjustment of production and costly inventories implies that wholesale gasoline prices will respond with a lag to crude oil cost shocks unlike explanations that rely upon menu costs imperfect information or long term buyer seller relationships this model predicts that futures prices for gasoline will adjust incompletely to crude oil price shocks that occur close to the expiration date of the futures contract we test and confirm this implication examining wholesale price responses in 188 gasoline markets we also find that firms with market power adjust prices more slowly than do competitive firms consistent with the model

the asymmetric response of gasoline prices to oil price shocks and policy uncertainty abstract this study shows that the effect of oil price shocks on the real price of gasoline is interrelated with economic policy uncertainty economic policy shocks are linked with increased real price of gasoline and reduced consumption of gasoline there is evidence that the fluctuation of both real gasoline prices and of gasoline consumption is associated with uncertainty of tax legislation expiration expectation as well as other components of economic policy uncertainty positive shocks to economic policy uncertainty have relatively larger effects on gasoline prices than do negative shocks to economic policy uncertainty economic policy uncertainty responds asymmetrically to increases and decreases in real oil price shocks to economic policy uncertainty account for 16 1 of variation in real gasoline prices and for 4 9 of variation in gasoline consumption in the long run

prices rise faster than they fall output prices tend to respond faster to input increases than to decreases this tendency is found in more than two of every three markets examined it is found as frequently in producer goods markets as in consumer goods markets in both kinds of markets the asymmetric response to cost shocks is substantial and durable on average the immediate response to a positive cost shock is at least twice the response to a negative shock and that difference is sustained for at least five to eight months unlike past studies which documented similar asymmetries in selected markets gasoline agricultural products etc this one uses large samples of diverse products 77 consumer and 165 producer goods accordingly the results suggest a gap in an essential part of economic theory as a start on filling this gap the study finds no asymmetry in the resonse of an individual decision maker a supermarket chain to its costs but it finds above average asymmetry where a cost shock is filtered through a fragmented w

retail gasoline price dynamics and local market power 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

oil and pump prices testing their asymmetric relationship in a robust way abstract the aim of this study is to provide a novel method to assess whether retail fuel prices respond asymmetrically to changes in the international crude oil prices to do so we consider the whole supply chain we use daily data and we depart from the current practice in the literature that focuses on prices rather we consider the mark ups of both the refineries and retailers hence we show that we first need to assess whether the refineries mark up responds asymmetrically to the international crude oil prices and subsequently whether the retailers mark up shows an asymmetric behaviour relatively to changes in the refined fuel prices focusing in greece as our case study our findings show that greek fuel retailers do not change their mark up behaviour based on changes of the refined fuel price by contrast the asymmetric behaviour is evident in the refineries mark up relatively to changes in the international crude oil prices which is then passed through to the retailers and consumers finally we provide evidence that weekly and monthly data mask any such asymmetric relationship thus we maintain that unless the appropriate data frequency fuel price transformations and the whole supply chain are considered misleading findings could be revealed

conformism and structural change using a simple multisector model of endogenous growth we show that commodity specific consumption externalities can be a source of structural change when the degrees of consumption externalities are different between goods each sector grows at a different rate however the aggregate economy exhibits balanced growth in that capital stock and expenditure grow at the same constant rate a three sector version of our model may reconcile kaldor s stylized facts with empirically plausible profiles of industrial structure transformation

estimating retail gasoline price dynamics the effects of sample characteristics and research design the study shows that much of the variation in the findings of the literature on retail gasoline price dynamics is systematic rather than sample variation from using different data estimates of pass through rates depend systematically on research design and features of the data such as the sampling frequency the choice of upstream price whether taxes are included or not the sample length and the postulated lag structure in addition there are systematic differences between time periods and countries using a 20 year long dataset of 28 european union countries we quantify the extent of estimate variation that arises from the choice of data structure from that arising from temporal and country heterogeneity and sampling variation we also show that country heterogeneity itself has systematic components with wealthier countries experiencing slower adjustments our results inform the interpretation of results on pass through rates derived from error correction models they are also of relevance for the broader literature estimating the transmission of price shocks in the economy

a variety expansion model of growth with external habit formation abstract this paper introduces consumption externalities into one of the base line models of growth in which continuing expansion of product variety sustains long term growth we assume that consumers set a benchmark stock of consumption for each good so that there are commodity specific external effects each good is produced by a monopolistically competitive firm and the firm exploits the presence of consumption external effects in determining its profit maximizing price given those settings we show that the introduction of consumption externalities may affect the balanced growth characterization transitional dynamics and policy effects in fundamental manners

a threshold cointegration analysis of asymmetric price transmission from crude oil to gasoline prices abstract this study provides new supportive evidence for asymmetric adjustment in u s retail gasoline prices the asymmetric transmission is found to occur not just through the spot markets of crude oil and refinery gasoline but also through their future markets further evidence also shows that the observed asymmetry in price transmission primarily occurs downstream not upstream of the transmission process

on the validity of econometric techniques with weak instruments inference on returns to education using compulsory school attendance laws we evaluate angrist and krueger 1991 and bound jaeger and baker 1995 by constructing reliable confidence regions around the 2sls and liml estimators for returns to schooling regardless of the quality of the instruments the results indicate that the returns to schooling were between 8 and 25 percent in 1970 and between 4 and 14 percent in 1980 although the estimates are less accurate than previously thought most specifications by angrist and krueger 1991 are informative for returns to schooling in particular concern about the reliability of the model with 178 instruments is unfounded despite the low first stage f statistic finally we briefly discuss bias adjustment of estimators and pretesting procedures as solutions to the weak instrument problem

do gasoline prices exhibit asymmetry not usually previous studies have found evidence of asymmetric price adjustment in u s retail gasoline prices in that gasoline prices rise more rapidly in response to a cost increase than fall in response to a cost decrease by estimating a threshold cointegration model that allows for multiple regimes i am able to test how sensitive this result is to outlying observations in contrast to previous studies i find little evidence of asymmetry for the vast majority of observations and that the asymmetry is being driven by a small number of outlying observations

is there an asymmetry in the response of diesel and petrol prices to crude oil price changes evidence from new zealand this paper examines how pre tax petrol and diesel prices in new zealand respond to changes in crude oil prices using an asymmetric error correction model our results show that oil companies adjust diesel prices upwards faster than they adjust them downwards and the difference is statistically significant however we find no statistical evidence for an asymmetry in the adjustment of petrol prices even though the magnitude of estimated coefficients suggests a faster response to rising prices as diesel pricing is not as competitive as petrol pricing calls for further government actions and monitoring of the oil market may be justified our findings also have important implications for the conduct of monetary policy as the pass through of crude oil price changes can affect cost push inflation

asymmetries outliers and structural stability in the us gasoline market abstract by using a recently developed nonlinear cointegration methodology and a sample that encompasses more than thirty years of monthly data we investigate whether the transmission of crude oil price variations to gasoline prices in the us market is asymmetric i e depends on the sign of the change in the explanatory variable considering both the long and the short run the model is further extended by taking separately into account the effects of extreme and mild changes in crude oil prices this allows us to verify whether and to what extent the size and shape of any observed asymmetry in pricing is affected by the presence of outliers moreover given the substantial length of the sample considered we test for the possible presence of multiple structural breaks of unknown timing in the cointegrating vector our results indicate that the relationship between the prices of gasoline and crude oil has undergone a single structural break in the late 2008 and that after the break extreme observations have a non negligible role in shaping asymmetry

evaluating the effects of optimally distributed public programs child health and family planning interventions this paper develops and tests an optimizing model determining the distribution of family planning and health subsidies across heterogeneous households and assesses the biases in cross area estimates of the health effects of such subsidies due to public resource optimization the model incorporates both health externalities and the endogenous response of the size of the recipient population to program subsidies longitudinal data describing child health and publicly provided family planning and health programs in 20 barrios in laguna province in the philippines are used to estimate the effects of such programs on child health and the relationships between the distribution of the programs and preprogram health levels the impact of a program on a particular childs health status is viewed as dependent upon the childs length of exposure to the program a basic feature of the model is the presence of health externalities which is shown to be sufficient along with plausible features of household behavior to make selective subsidization of fertility control either alone or in combination with health investment subsidies pareto efficient the model suggests that subsidization of fertility control is likely to be pareto efficient in the presence of health or human capital externalities when human capital and family size are gross substitutes and or when any per child human capital subsidies may substitute for direct subsidies to health investment and an equalizing distribution of the subsidies the highest family planning subsidies to the lowest health recipient households is efficient when both health and family planning subsidies are used fertility control subsidies minimize the subsidy burden for donors and are highest when total subsidy expenditures per child are greatest

jealousy and equilibrium overconsumption the idea that the happiness of an individual depends upon the consumption of others is widely viewed as an important feature of our shared social existence recent research in finance has used this idea through consumption externalities to explore asset pricing anomalies consumption externalities potentially break the link between pareto optimality and competitive equilibria and open the door for beneficial government intervention e g lars ljungqvist and harald uhlig 2000 in this paper we delineate two effects that a consumption externality may have an increase in aggregate consumption may a raise the marginal utility of individual consumption relative to leisure and or b lower an individual s utility level we refer to a as keeping up with the joneses henceforth kuj following jordi gali 1994 and we refer to b as jealousy jealousy is a distinct concept from kuj under kuj an individual derives greater utility from additional own consumption relative to leisure when others consume more at the same time higher per capita consumption holding fixed individual consumption can trigger either jealousy so that individual utility falls or admiration so that individual utility rises in section i of this paper we show that jealousy implies that the laissez faire equilibrium consumption level is greater than the optimal level whether preferences exhibit kuj is not necessary for this main result intuitively in the presence of jealousy consumption is similar to pollution overpollution exists because individuals do not take into account the cost of polluting on others not because an increase in economywide pollution makes the return to individual polluting higher similarly overconsumption exists because individuals do not take into account the negative effect of own consumption on jealous others things go in the opposite direction when individuals are admiring in section ii we consider a functional form that encompasses several existing models we show that jealousy determines the optimal tax to correct overconsumption and that kuj is mainly important for asset pricing

asymmetric dynamic pricing in a local gasoline retail market 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

gender agricultural production and the theory of the household virtually all models of the household assume that the allocation of resources is pareto efficient within many african households agricultural production occurs on many plots controlled by different members of the household pareto efficiency implies that factors should be allocated efficiently across these plots i find in contrast that plots controlled by women are farmed much less intensively than similar plots within the household controlled by men the estimates imply that about 6 percent of output is lost because of inefficient factor allocation within the household the paper suggests a new approach to modeling intrahousehold allocation consistent with the empirical results

asymmetry in retail gasoline and crude oil price movements in the united states an application of hidden cointegration technique abstract there is a common belief that gasoline prices respond more quickly to crude oil price increases than decreases some economists and politicians believe that asymmetry in oil and gasoline price movements is the outcome of a non competitive gasoline market requiring that governments take policy action to address unfair pricing there is no consensus as to the existence or nature of the asymmetric relationship between prices of gasoline and crude oil much of this literature specifies asymmetry in the speed of adjustment and short run adjustment coefficients in contrast granger and yoon s granger c w and yoon g hidden cointegration university of california san diego department of economics working paper 2002 crouching error correction model cecm identifies asymmetry of the cointegrating vectors between components cumulative positive and negative changes of the series applying the cecm to retail gasoline and crude oil prices for the u s we find that there is only evidence of cointegration between positive components of crude oil prices and negative components of gasoline prices in contrast to the literature which attributes asymmetric price movements to market power of refiners these findings suggest that gasoline prices in the long run are more influenced by the technological changes on the demand side than crude oil price movements on the supply side

consumption externalities habit formation and equilibrium efficiency we analyze the welfare properties of the competitive equilibrium in a capital accumulation model where individual preferences are subject to both habit formation and consumption spillovers using an additive specification for preferences according to which the argument in the utility function is a linear combination of present and past values of own consumption and consumption spillovers we analyze the circumstances under which these spillovers are a source of inefficiency it is shown that consumption externalities have to interact with habits in order to generate an inefficient dynamic equilibrium finally we characterize optimal tax policies aimed at restoring efficient decentralized paths

the role of information in retail gasoline price dispersion abstract collecting information on prices is a costly endeavor the cost depends on the relative ease with which those prices can be collected and in many retail gasoline markets there is a substantial divide in the ease of collecting information with regular grade gasoline on one side of the divide and midgrade and premium grade gasoline on the other regular grade prices are prominently displayed on large signboards in front of gasoline stations while the prices of higher octane grades except where required by law are rarely displayed in this article the effects of differential by grade price information on search and gasoline price dispersion are examined a rank reversal test is used to test whether the observed grade specific price dispersion is consistent with search or non search related causes and finding the former a series of tests are presented to test for the effect of price information and other leading hypotheses a significantly concave curvature in the price dispersion coefficients across the three grades supports a price information hypothesis detailed socioeconomic data on consumers spatially matched to the stations they are most likely to patronize shows that income is a secondary factor implications for policy are discussed

new evidence on asymmetric gasoline price responses in a 1997 paper borenstein cameron and gilbert bcg claim that gasoline prices rise quickly following an increase in the price of crude oil but fall slowly following a decrease this note estimates an error correction model with daily spot gasoline and crude oil price data over the period 1985 1998 and finds no evidence of asymmetry in wholesale gasoline prices the sources of the difference in results are twofold first we use the standard engle granger two step estimation procedure whereas bcg used a nonstandard estimation methodology second even using bcg s nonstandard specification the use of daily rather than weekly data yields little evidence of price asymmetry

the effects of rural electrification on employment new evidence from south africa this paper estimates the impact of electrification on employment growth by analyzing south africa s mass roll out of electricity to rural households using several new data sources and two different identification strategies an instrumental variables strategy and a fixed effects approach i find that electrification significantly raises female employment within five years this new infrastructure appears to increase hours of work for men and women while reducing female wages and increasing male earnings several pieces of evidence suggest that household electrification raises employment by releasing women from home production and enabling microenterprises migration behavior may also be affected jel h54 l94

are the crude oil markets really becoming more efficient over time some new evidence abstract we replicate the study of tabak cajueiro 2007 are the crude oil markets becoming weakly efficient over time a test for time varying long range dependence in prices and volatility published in energy economics 29 pp 28 36 the results have been mostly confirmed specifically we have confirmed that the crude oil markets efficiency could be rejected up till approximately 1994 and this holds for both studied crude oil commodities brent and wti analyzing an extended dataset up till june 2017 we find that the markets remained efficient at least with respect to long range dependence until the outbreak of the global financial crisis in 2008 this is confirmed by all three applied methods the rescaled range analysis used in the original study and the detrended fluctuation analysis and the geweke porter hudak estimator which were added to strengthen validity of the results the markets returned back to efficiency around 2012 and remained there until 2015 when the hurst exponent started another rally and stayed rather high until the end of the examined sample comparing the two markets the brent crude oil shows stronger signs of inefficiency during the inefficient periods compared to the wti crude oil this is in hand with the results reported in the original study apart from rerunning the analysis on an extended dataset and using two additional methods we also provide a firmer validity check using the moving block bootstrap procedure which outperforms the original shuffling procedure in the provided forecasting study

rockets and feathers revisited an international comparison on european gasoline markets this paper re examines the issue of asymmetries in the transmission of shocks to crude oil prices onto the retail price of gasoline relative to the previous literature the distinguishing features of the present paper are i use of updated and comparable data to carry out an international comparison of gasoline markets ii two stage modeling of the transmission of oil price shocks to gasoline prices first refinery stage and second distribution stage in order to assess possible asymmetries at either one or both stages iii use of asymmetric error correction models to distinguish between asymmetries that arise from short run deviations in input prices and from the speed at which the gasoline price reverts to its long run level iv explicit possibly asymmetric role of the exchange rate as crude oil is paid for in dollars whereas gasoline sells for different sums of national currencies v bootstrapping of f tests of asymmetries in order to overcome the lowpower problem of conventional testing procedures in contrast to several previous findings the results generally point to widespread differences in both adjustment speeds and short run responses when input prices rise or fall

rockets and feathers meet joseph reinvestigating the oil gasoline asymmetry on the international markets abstract we reinvestigate the rockets and feathers effect between retail gasoline and crude oil prices in a new framework of fractional integration long term memory and borderline non stationarity the most frequently used error correction model is examined in detail and we find that the prices return to their equilibrium value much more slowly than would be typical for the error correction model such dynamics is usually referred to as the joseph effect the standard procedure is shown to be troublesome and we introduce two new tests to investigate possible asymmetry in the price adjustment to equilibrium under these complicated time series characteristics on the dataset of seven national gasoline prices we find no statistically significant asymmetry the proposed methodology is not limited to the gasoline and crude oil case but it can be utilized for any asymmetric adjustment analysis

retail price asymmetries in local gasoline markets the experience of the salt lake city retail gasoline market during the 1989 to 1993 period suggests that there was asymmetric adjustment wholesale and retail price data unique to the salt lake market are used to test for the existence of three types of price asymmetry during this period with respect to the magnitude of the pass through of wholesale price changes evidence of price asymmetry during periods of average weekly wholesale price changes is found however during market shocks the evidence points in the direction of retail price symmetry evidence of asymmetry with respect to the timing and pattern of the retail price response is found for periods of both average and market shock changes since gasoline is purchased by the consumer in local markets conclusions reached by studies of market pricing behaviour that rely on national data may not be relevant for local policy decisions this appears to be the case for the salt lake city market

can exchange rate pass through explain the asymmetric gasoline puzzle evidence from a pooled panel threshold analysis of the eu abstract this study contributes to the literature since it tries to link the exchange rate pass through erpt with the rockets and feathers hypothesis using a panel of eu 28 countries allowing for the existence of an endogenous threshold variable our empirical findings indicate that the threshold model is better suited to this analysis than the baseline linear adjustment model this is the case since the latter restricts the threshold to be centered around zero and the dynamic response to cumulative shocks cannot be properly identified the empirical findings reveal that the threshold variable expressed by the trade weighted dollar exchange rate index is statistically significant only in the sample above the threshold high regime this means that for the net eu exporting countries fluctuations in the real effective exchange rate of the us against its major eu trading partners do affect the level of pre tax retail gasoline prices with the relevant elasticity exceeding unity complete erpt moreover all the statistical tests reject the null hypothesis that there is no significant threshold and thus an asymmetric adjustment gasoline mechanism prevails the impulse response functions confirm our empirical findings that erpt can explain asymmetric gasoline pricing within the eu periphery

do gasoline prices respond asymmetrically to crude oil price changes the authors test and confirm that retail gasoline prices respond more quickly to increases than to decreases in crude oil prices among the possible sources of this asymmetry are production inventory adjustment lags and market power of some sellers by analyzing price transmission at different points in the distribution chain the authors attempt to shed light on these theories spot prices for generic gasoline show asymmetry in responding to crude oil price changes which may reflect inventory adjustment effects asymmetry also appears in the response of retail prices to wholesale price changes possibly indicating short run market power among retailers