Title

Price pass-through in US gasoline markets

Document Type

Article

Publication Date

6-1-2017

Publication Title

Energy Economics

Volume

65

First Page

42

Last Page

49

Keywords

Crude oil, Error correction, Gasoline, Pass through

Abstract

© 2017 Elsevier B.V. Using an error-correction model in a seemingly unrelated regression framework, we examine regional differences in the price pass-through from crude oil spot prices to retail gasoline pump prices. We show that regional differences do exist both in the short run and long run adjustment processes. Depending on the region, a $1 per barrel change in crude oil prices is correlated with a change in retail gasoline pump prices somewhere between 2.36¢ and 2.58¢. We examine the presence of the rockets and feathers phenomenon using both single period coefficient tests and multiple period impulse response functions.

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