Weiss, Christoph, Koch, Birgit, Loy, Jens-Peter, Steinhagen, Carsten . 2018. Price Transmission and Local Market Power: Empirical Evidence from the Austrian Gasoline Market. Applied Economics. 50 (53), 5728-5746.
BibTeX
Abstract
We analyse the impact of local market power on price margins and different dimensions of price adjustment dynamics (speed and asymmetry of price transmission) using data for a large number of individual gasoline stations in Austria. Specific attention is paid to threshold effects in price adjustment. Our results clearly suggest that the speed of price transmission between the Brent crude oil index and retail diesel prices is higher in a more competitive environment. While evidence on the relationship between local market power and asymmetries in the speed of price adjustment is mixed, our findings regarding asymmetries in price thresholds are clear: in regions where competition from neighbouring rivals is weak and/or consumers’ price elasticity of demand is low (stations located on the highway), positive thresholds significantly exceed negative ones, which corresponds to the ‘rockets and feathers phenomenon’. As expected, we observe that prices are lower in more competitive local markets.
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Status of publication | Published |
---|---|
Affiliation | WU |
Type of publication | Journal article |
Journal | Applied Economics |
Citation Index | SSCI |
WU Journalrating 2009 | A |
WU-Journal-Rating new | FIN-A, VW-D |
Language | English |
Title | Price Transmission and Local Market Power: Empirical Evidence from the Austrian Gasoline Market |
Volume | 50 |
Number | 53 |
Year | 2018 |
Page from | 5728 |
Page to | 5746 |
Reviewed? | Y |
URL | https://www.tandfonline.com/doi/abs/10.1080/00036846.2018.1488063 |
DOI | http://dx.doi.org/10.1080/00036846.2018.1488063 |
Open Access | N |
JEL | D4, L11, R32 |
Associations
- People
- Weiss, Christoph (Details)
- Koch, Birgit (Former researcher)
- Loy, Jens-Peter (Former researcher)
- External
- Steinhagen, Carsten (Universität Kiel, Germany)
- Organization
- Department of Economics (Weiss) (Details)
- Research areas (ÖSTAT Classification 'Statistik Austria')
- 5300 Economics (Details)
- 5370 Industrial economics (Details)