Price Effects of the Austrian Fuel Price Fixing Act: A Synthetic Control Study

Maike Becker, Gregor Pfeifer, Karsten Schweikert and Gregor-Gabriel Pfeifer
Authors registered in the RePEc Author Service: Gregor Pfeifer

No 8819, CESifo Working Paper Series from CESifo

Abstract: Fuel prices are commonly perceived to be excessively high, which regularly triggers political discussions about fuel price regulations. Consumers demand stricter fuel price regulations to provide transparency about the current price level and to protect them from sudden price fluctuations. Such regulations are already in place in several countries, but whether they indeed help lower the overall fuel price level is unclear. In this paper, we study the effect of Austria’s Fuel Price Fixing Act on gasoline and diesel price levels. Using the synthetic control method, we construct a counterfactual and estimate Austria’s price trends in absence of the intervention. Our empirical results suggest, that immediately after the Fuel Price Fixing Act came into effect, gasoline prices are 23.4% lower than the synthetic control predicts. The effect on diesel prices appears to be less pronounced and amounts to 6.6% lower prices. Austria’s fuel price regulation seems to have been effective in terms of gasoline prices but may need further refinements to effectively tackle diesel prices as well.

Keywords: causal effects; diesel; gasoline; price regulation; retail fuel prices (search for similar items in EconPapers)
JEL-codes: C22 D43 Q41 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ene and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Price Effects of the Austrian Fuel Price Fixing Act: A Synthetic Control Study (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_8819

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