Are the transport fuel retail markets regionally integrated in Spain? Evidence from price transmission

Balaguer, Jacint; Ripollés, Jordi

doi:10.1016/j.econmod.2014.07.017

Economic Modelling

2014

DOI: 10.1016/j.econmod.2014.07.017

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Are the transport fuel retail markets regionally integrated in Spain? Evidence from price transmission

Jacint Balaguer

Jordi Ripollés

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Cited by 2 publications

References 52 publications

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Revisiting the importance of border effect in sub‐national regions. Evidence from a quasi‐experimental design

Balaguer

Ripollés²

2018

Papers in Regional Science

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Literature provides significant border effects on consumer prices even for sub‐national regions. Nevertheless, Gorodnichenko and Tesar showed that the evidence from the usual methodology could be illusory if there is cross‐regional heterogeneity in the distribution of within‐region price differentials. We designed a quasi‐experiment that, using a transport fuel dataset, is applied to the Spanish regions. We found that, despite controlling for regional tax divergences, price differences remained critically dependent on regions. However, results suggest that the presence of borders per se is practically negligible to explain the lack of regional integration. Factors underlying the distribution heterogeneity are responsible for this.

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Revisiting the importance of border effect in sub‐national regions. Evidence from a quasi‐experimental design

Balaguer

Ripollés²

2018

Papers in Regional Science

Self Cite

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Asymmetric Price Transmission: A Case of Wheat in India

Paul

Karak

2022

Agriculture

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In the present paper, horizontal and vertical integration was carried out on the wholesale and retail prices of wheat in the major markets of India. On confirming cointegration between the wholesale and retail prices of wheat in all needs, the vector error correction model (VECM) was applied to find the speed of adjustment in the corresponding price channel. The results revealed that price signals are transmitted across regions, indicating that price changes in one market are consistently related to price changes in markets and can influence the prices in other markets. In addition to studying cointegration, threshold autoregressive (TAR) and Momentum TAR (MTAR) models were applied to test for asymmetric cointegration. Hasen and Seo’s test was used to test for the presence of threshold cointegration. It revealed a significant presence of asymmetric and nonlinear cointegration in many markets. Accordingly, a threshold VECM (TVECM) model with two regimes was applied. The results indicate that the retail price significantly responds to the deviations from the long-run equilibrium compared to the wholesale price.

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Are the transport fuel retail markets regionally integrated in Spain? Evidence from price transmission

Cited by 2 publications

References 52 publications

Revisiting the importance of border effect in sub‐national regions. Evidence from a quasi‐experimental design

Revisiting the importance of border effect in sub‐national regions. Evidence from a quasi‐experimental design

Asymmetric Price Transmission: A Case of Wheat in India

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