 Are unleaded gasoline and diesel price adjustments symmetric? A comparison of the four largest EU retail fuel marketsStelios Karagiannis, Yannis Panagopoulos and Prodromos Vlamis Economic Modelling, 2015, vol. 48, issue C, 281-291 Abstract: The purpose of this paper is to examine the nature of price adjustments in the gasoline markets of Germany, France, Italy and Spain. We examine whether crude oil prices are transmitted to the retail gasoline prices in the short and long run and we test the symmetry of price adjustments hypothesis. An Error Correction Model, which accounts for possible asymmetric adjustment behavior, is applied for the estimation of the international crude oil price pass-through and testing of the symmetric/asymmetric nature of the retail fuel price adjustments in these economies. Our results show that rigidities in the transmission process exist but the retail fuel speed of upward/downward price adjustment to equilibrium is considered as symmetric in all four economies analyzed. Thus, our findings on the whole do not provide firm evidence to support the “rockets and feathers” hypothesis that crude oil price increases are passed along to the retail customer more fully than the crude oil price decreases. Keywords: Crude oil price pass-through; “decomposed” Error Correction Model; Symmetry of price adjustments hypothesis (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:eee:ecmode:v:48:y:2015:i:c:p:281-291 DOI: 10.1016/j.econmod.2014.11.003 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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