A comparison of regular price cycles in gasoline and liquefied petroleum gas

Sean Isakower and Zhongmin Wang

Energy Economics, 2014, vol. 45, issue C, 445-454

Abstract: Regular and asymmetric gasoline price cycles are observed in a number of countries. While most studies found that such price cycles are well characterized by the theoretical Edgeworth price cycle, some studies suggest alternative explanations. This paper contributes to this literature by being the first to compare regular price cycles in a nongasoline product—liquefied petroleum gas (LPG)—with gasoline price cycles. Our main finding is that LPG price cycles in the Perth area of Western Australia are much longer and more asymmetric than gasoline price cycles in the same market. This finding is consistent with Noel's (2008) prediction that Edgeworth cycles are longer and more asymmetric when aggregate demand is more elastic—the aggregate demand for LPG is presumably more elastic than the demand for gasoline.

Keywords: Edgeworth price cycle; Liquefied petroleum gas; Oligopoly pricing; Price elasticity (search for similar items in EconPapers)
JEL-codes: D22 D43 L13 L71 Q4 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0140988314001959
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:45:y:2014:i:c:p:445-454

DOI: 10.1016/j.eneco.2014.08.014

Access Statistics for this article

Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

More articles in Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().