 The Market Effects of Going Green: Evidence from California’s Wholesale Reformulated Gasoline MarketJennifer L. Brown The Energy Journal, 2009, vol. 30, issue 3, 115-128 Abstract: This paper analyzes the market changes that occurred in California’s refining industry following the 1992 implementation of the California Air Resources Board’s Phase II reformulated gasoline regulations. This paper uses monthly panel data to determine the impact that these regulations have had on the disparity between California’s finished gasoline rack prices and that in other regions of the country. The findings suggest that large refiner compliance to Phase II increased the rack price of finished gasoline in California as compared with other regions. This relative price increase, which was likely triggered by the increased production costs associated with Phase II, is consistent with similar results found throughout the literature. However, as small refiners were required to comply with these regulations, this analysis finds that the premium paid for finished gasoline in California increased significantly. This additional increase in the rack price differential, along with trends in industry concentration, suggests that Phase II may have disproportionately disadvantaged California’s small refiners, causing increased profits and market share for larger competitors. Keywords: Gasoline prices; regulation; reformulated gasoline; California (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:30:y:2009:i:3:p:115-128 DOI: 10.5547/ISSN0195-6574-EJ-Vol30-No3-6 Access Statistics for this article More articles in The Energy Journal |
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