Do retail gasoline prices rise more readily than they fall?

Al-Gudhea, Salim; Kenç, Turalay; Dibooğlu, Sel

doi:10.1016/j.jeconbus.2006.10.002

Cited by 59 publications

(38 citation statements)

References 14 publications

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“…As a result, the asymmetric transmission is caused by consumer search costs. Furthermore, Al-Gudhea et al [31] used threshold and momentum models of co-integration with daily prices at different stages in the distribution chain to support Lewis' [30] empirical results. When dividing all the external shocks into small and large ones, Al-Gudhea et al [31] obtained that the asymmetry is more pronounced for small shocks, which may be the result of consumer search costs.…”

Section: Resultsmentioning

confidence: 99%

Rockets and Feathers: The Asymmetric Effect between China’s Refined Oil Prices and International Crude Oil Prices

Chen

Huang

2017

Sustainability

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This paper employs an asymmetric error-correction model (AECM), and uses monthly data on wholesale prices of gasoline and diesel products in China and international crude oil prices from February 2006 to October 2013 to examine whether China's gasoline and diesel prices adjust asymmetrically to international crude oil price changes. Our empirical results suggest that increases and decreases in international oil prices have asymmetric effects on both wholesale prices of gasoline and diesel fuel in China, and that both increases and decreases in international oil prices have a greater effect on diesel prices than on gasoline prices in China. If there is no change in the maximum retail price, the asymmetry results from the transmission of wholesale prices in China with international oil prices. However, if there is a change in maximum retail prices, both international oil prices and maximum retail prices cause the asymmetry.

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Section: Resultsmentioning

confidence: 99%

Rockets and Feathers: The Asymmetric Effect between China’s Refined Oil Prices and International Crude Oil Prices

Chen

Huang

2017

Sustainability

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“…Previous works based on A-ECM and TAR-ECM include Al-Gudhea et al (2007), Balke et al (1998), Douglas (2010, Galeotti et al (2003), Godby et al (2000), Grasso and Manera (2007) and Fosten (2012).…”

Section: Models and Methodsmentioning

confidence: 99%

“…Although, starting from Bacon (1991), there have been many contributions addressing how downstream prices respond to increases in upstream prices (see, among others, Al-Gudhea et al, 2007;Balke et al, 1998;Borenstein et al, 1997;Brown and Yücel, 2000;Douglas, 2010;Galeotti et al, 2003;Godby et al, 2000;Grasso and Manera, 2007), little is known about the forecasting performance of reducedform econometric models incorporating RFH from crude oil to gasoline. As pointed out by Bachmeier and Griffin (2003), if gasoline prices respond asymmetrically to crude oil price variations, asymmetric cointegration models should produce more accurate forecasts than the symmetric Error Correction Model (ECM).…”

Section: Introductionmentioning

confidence: 99%

Forecasting the oil–gasoline price relationship: Do asymmetries help?

2014

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“…Huang, Hwang and Peng [46] use a VTAR model to investigate the impact of oil price changes on economic activity. Al-Gudhea, Kenc, and Dibooglu [2] use a threshold VECM to investigate the relation between daily wholesale and retail gasoline prices. They find asymmetric responses, in that increases in wholesale prices are passed to retail prices more quickly than decreases in wholesale prices.…”

Section: Pricesmentioning

confidence: 99%