Pump Prices and Oil Prices: A Tale of Two Directions

Nodir Adilov () and Hedayeh Samavati ()

Atlantic Economic Journal, 2009, vol. 37, issue 1, 64 pages

Abstract: It has been argued that retail gasoline prices adjust more quickly to crude oil price increases than to price decreases. We investigate this issue using the statewide data on weekly retail gasoline prices in the United States between January 2000 and June 2007. Our analysis does not confirm the prediction that gasoline prices adjust more quickly to price increases in crude oil prices. On the contrary, the results suggest that in some geographic areas gasoline prices could change faster when crude oil prices decrease. These findings suggest that a national or a one size fits all energy policy for the United States may be misguided. Copyright International Atlantic Economic Society 2009

Keywords: Gasoline markets; Price adjustment; Price response; Crude oil prices; D00; D21; L10; L60 (search for similar items in EconPapers)
Date: 2009
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DOI: 10.1007/s11293-008-9152-8

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