Exploring the life of fuel price responses in retail markets. The effect of cross-sectional aggregation
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Title
Exploring the life of fuel price responses in retail markets. The effect of cross-sectional aggregationDate
2018-08Publisher
ElsevierBibliographic citation
BALAGUER, Jacint; RIPOLLÉS, Jordi (2018). Exploring the life of fuel price responses in retail markets. The effect of cross-sectional aggregation. Energy Policy, v. 119, p. 495-501Type
info:eu-repo/semantics/articlePublisher version
https://www.sciencedirect.com/science/article/pii/S0301421518303069Version
info:eu-repo/semantics/publishedVersionAbstract
Empirical studies on vertical price transmission in retail fuel markets commonly use average group data of petrol stations. In this paper a simulation approach is employed to illustrate that, in this case, the persi ... [+]
Empirical studies on vertical price transmission in retail fuel markets commonly use average group data of petrol stations. In this paper a simulation approach is employed to illustrate that, in this case, the persistence of price responses tends to be overestimated. To explore the real extent of the problem, we apply the mean group (MG) and the mean group with common correlated effects (MG-CCE) estimators to individual data from petrol stations. When heterogeneity in the pricing dynamics is captured by MG and MG-CCE estimators, persistence of retail price responses becomes considerably lower than the typical OLS estimations from average group data would suggest. [-]
Is part of
Energy Policy (2018), v. 119Investigation project
1) Financial support from the Spanish Ministry of Economy and Competitiveness (ECO2014‐58975‐P); 2) Universitat Jaume I (UJI-B2017-17)Rights
http://rightsstatements.org/vocab/CNE/1.0/
info:eu-repo/semantics/openAccess
info:eu-repo/semantics/openAccess
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