Template-Type: ReDIF-Article 1.0
Author-Name:  Emmanuel Asane-Otoo and Bernhard C. Dannemann
Title:  Rockets and Feathers Revisited: Asymmetric Retail Gasoline Pricing in the Era of Market Transparency
Classification-JEL: F0
Volume:  Volume 43
Issue:  Number 6
Year:  2022
Abstract:  In this paper, we revisit the empirical observation that prices rise like rockets when input costs increase but fall like feathers when input costs decrease. The analysis draws on a novel data set that includes daily retail prices of gasoline from 12,804 stations in Germany from January 1, 2014 to December 31, 2018. Our findings based on pooled-panel asymmetric error correction models indicate that the pattern of rockets and feathers is the norm rather than the exception. Our results further show that temporal aggregation of station-level price data leads to inaccurate inferences and could account for the inconclusive findings in the literature.
Handle: RePEc:aen:journl:ej43-6-Asane-Otoo
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=3904
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