On the dynamics of gasoline market integration in the United States: Evidence from a pair-wise approach
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 bivaria...
| Autores: | , , |
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| Tipo de documento: | artigo |
| Estado: | Versão publicada |
| Data de publicação: | 2013 |
| País: | Colombia |
| Recursos: | Universidad del Rosario |
| Repositório: | Repositorio EdocUR - U. Rosario |
| Idioma: | inglês |
| OAI Identifier: | oai:repository.urosario.edu.co:10336/23932 |
| Acesso em linha: | https://doi.org/10.1016/j.eneco.2012.10.008 https://repository.urosario.edu.co/handle/10336/23932 |
| Access Level: | Acceso aberto |
| Palavra-chave: | Bivariate Gas stations Gasoline prices Law of one prices Market integration Pair-wise approach Panel data Refining capacity Regional integration Regional markets Commerce Costs Integration Refining Taxation Gasoline Economic integration Gas supply Price dynamics United States Speed of adjustment |
| Resumo: | 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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