On the dynamics of gasoline market integration in the United States: Evidence from a pair-wise approach

Mark J. Holmes, Jesús Otero, Theodore Panagiotidis

Resultado de la investigación: Contribución a RevistaArtículo

10 Citas (Scopus)

Resumen

This paper employs a pair-wise approach to examine regional integration in the US gasoline market. Using gasoline price data at the state level over a period of more than two decades, we find strong support for the view that the law of one price holds in regional markets, as more than 80% of bivariate price differentials turn out to be stationary. Furthermore, we uncover evidence that the speed at which prices converge to the long-run equilibrium depends upon the distance between states. Asymmetries are also present in this relationship. Our findings suggest that the more similar are states with respect to taxation, gas stations and refining capacity, the faster is the speed of adjustment towards the long-run equilibrium. © 2012 Elsevier B.V.
Idioma originalEnglish (US)
Páginas (desde-hasta)503-510
Número de páginas8
PublicaciónEnergy Economics
DOI
EstadoPublished - mar 1 2013

Huella dactilar

Gasoline
Taxation
Refining
Gases
Long-run equilibrium
Gasoline market
Market integration
Law of one price
Gasoline prices
Gas
Regional integration
Speed of adjustment
Asymmetry

Citar esto

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On the dynamics of gasoline market integration in the United States: Evidence from a pair-wise approach. / Holmes, Mark J.; Otero, Jesús; Panagiotidis, Theodore.

En: Energy Economics, 01.03.2013, p. 503-510.

Resultado de la investigación: Contribución a RevistaArtículo

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T1 - On the dynamics of gasoline market integration in the United States: Evidence from a pair-wise approach

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AU - Otero, Jesús

AU - Panagiotidis, Theodore

PY - 2013/3/1

Y1 - 2013/3/1

N2 - This paper employs a pair-wise approach to examine regional integration in the US gasoline market. Using gasoline price data at the state level over a period of more than two decades, we find strong support for the view that the law of one price holds in regional markets, as more than 80% of bivariate price differentials turn out to be stationary. Furthermore, we uncover evidence that the speed at which prices converge to the long-run equilibrium depends upon the distance between states. Asymmetries are also present in this relationship. Our findings suggest that the more similar are states with respect to taxation, gas stations and refining capacity, the faster is the speed of adjustment towards the long-run equilibrium. © 2012 Elsevier B.V.

AB - This paper employs a pair-wise approach to examine regional integration in the US gasoline market. Using gasoline price data at the state level over a period of more than two decades, we find strong support for the view that the law of one price holds in regional markets, as more than 80% of bivariate price differentials turn out to be stationary. Furthermore, we uncover evidence that the speed at which prices converge to the long-run equilibrium depends upon the distance between states. Asymmetries are also present in this relationship. Our findings suggest that the more similar are states with respect to taxation, gas stations and refining capacity, the faster is the speed of adjustment towards the long-run equilibrium. © 2012 Elsevier B.V.

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