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Gasoline, Diesel and Motorfuel Demand in Taiwan

Christopher Garbacz

Year: 1989
Volume: Volume 10
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol10-No2-10
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Abstract:
The logarithmic flow models generate elasticity estimates for prices that generally exceed estimates of recent studies both for the short run and the long run. This holds true over gasoline, diesel, and total motorfuel models. The linear gasoline results for price elasticity are in the range of previous estimates. In the logarithmic stock flow models, estimates of gasoline price elasticity exceed both short- and long-run estimates of previous studies. The liner stock flow model generates a price elasticity that is no different than zero (statistically) and an income elasticity that appears to be large in the short-ran.



Demand for Ground Transportation Fuel and Pricing Policy in Asian Tigers: A Comparative Study of Korea and Taiwan

Sara Banaszak, Ujjayant Chakravorty and PingSun Leung

Year: 1999
Volume: Volume20
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol20-No2-6
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Abstract:
This paper examines the demand for gasoline and diesel in the ground transportation sectors of South Korea and Taiwan, comparing the effects of their different pricing policies and stages of economic growth. To account for substitutability between the two fuels, the model proposed here uses a system of equations estimated simultaneously with time-series data from 1973-1992. Results yield demand elasticities that confirm previous research showing that oil product demand is generally price inelastic, while income elasticities (reflecting a longer period of economic growth than previous studies in the Asian region) are lower than those previously reported. The estimated demand functions are then used to generate forecasts for both countries and, in particular, for an assumed reduction in a 180% tax on gasoline in Korea. Forecasted increases in demand by the year 2010 range from 40 to 180%, while the tax analysis suggests that Korea's pricing policy has reduced total demand and promoted the use of diesel over gasoline.



Testing for Asymmetric Pricing Behaviour in Irish and UK Petrol and Diesel Markets

Colin Bermingham and Derry O'Brien

Year: 2011
Volume: Volume 32
Number: Number 3
DOI: 10.5547/ISSN0195-6574-EJ-Vol32-No3-1
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Abstract:
This paper empirically tests whether Irish and UK petrol and diesel markets are characterised by asymmetric pricing behaviour. The econometric assessment uses threshold autoregressive models and a dataset of monthly refined oil and retail prices covering the period 1994 to mid-2009. In addition to providing an appraisal of the existence of asymmetry in the Irish and UK markets, the paper provides an important methodological contribution. Tests of asymmetry in the literature normally partition the sample into periods of falling and rising international oil prices. This fails to account for price pressures coming from the equilibrium error of the cointegrating relationship. In particular, the possibility of conflicting price pressures arising from short-run dynamics in retail prices and responses to disequilibrium errors needs to be explicitly modelled. We take this issue into account in an econometric model and we highlight the importance of this distinction. In terms of the asymmetric behaviour of these markets, the paper finds no evidence to support the "rockets and feathers" hypothesis that prices rise faster than they fall in response to changes in the value of international oil prices.



Pricing and Margins in the Retail Automotive Fuel Market: Empirical Evidence from Spain

Alejandro Bello, Ignacio Contín-Pilart, and M Blanca Palacios

Year: 2018
Volume: Volume 39
Number: Special Issue 1
DOI: 10.5547/01956574.39.SI1.abel
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Abstract:
This paper analyses the evolution of gross retail margins for automotive fuels in Spain between January 2001 and February 2013. We firstly empirically test for breaks in the time series of gross margins. Our results indicate that there is only one break-point, in mid-2008, just when the demand for automotive fuels drops due to the economic crisis and the difference between the Spanish and the European retail margins increase notably. In addition, a regression analysis shows that the gross retail margins were higher during the recessive period of the Spanish economy (2008-2013) than before. Furthermore, we examine the causes of the break-point and of the subsequent evolution of margins. We find no evidence to support either the prohibition of using retail price maintenance (RPM) and recommended prices in the supply contracts or a supply cost change of automotive fuels as the cause of the evolution of retail margins. In addition, empirical evidence indicates that retail prices respond symmetrically to changes in wholesale prices. Instead, we show that the data are consistent with some firms exercising market power during the recessive period of the Spanish economy.





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