Asymmetric Price Transmission between Crude Oil and the US Gasoline Market

Najmeh Kamyabi () and Benaissa Chidmi
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Najmeh Kamyabi: Department of Economics, California State University Bakersfield, 9001 Stockdale Hwy, Bakersfield, CA 93311, USA
Benaissa Chidmi: Department of Agricultural & Applied Economics, Texas Tech University, MS 42132, Lubbock, TX 79409, USA

JRFM, 2023, vol. 16, issue 7, 1-11

Abstract: Gasoline and crude oil price movements have been the focus of many studies in the last decade. We use the asymmetric error correction model (ERM) to examine the hypothesis of asymmetric pricing for both regular and premium gasoline markets at the US national level and in the four states with the highest gasoline consumption. Using weekly crude oil and retail gasoline prices from June 2000 to February 2023, the results show an asymmetric response in the gasoline market for all four states and at the national level. However, the adjustment speed tends to differ for the types of gasoline and across states. The implications of these results for policy and welfare are discussed in this study.

Keywords: gasoline; crude oil; asymmetric pricing (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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