Cleveland Gasoline Price Responses

When oil prices increase, we are likely to see gas prices increase instantaneously. When oil prices decrease, there tend to be time lags associated with lower gas prices. (Bacon 1991) illustrates this response as rockets and feathers: gasoline prices shooting up like rockets in responses to positive oil price shocks and floating down like feathers in response to negative shocks This article investigates the rocket and feathers hypothesis between gas stations in the Cleveland Ohio area. This analysis shows that it takes roughly 4.5 weeks for the price shock to be absorbed by retail gasoline prices. The asymmetry appears to increase as time from the initial shock passes, as initially expected.


Issue Date:
Jan 17 2018
Publication Type:
Conference Paper/ Presentation
Language:
English




 Record created 2018-01-19, last modified 2018-01-22


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