AUSTIN – The Texas Public Policy Foundation’s Economist Dr. Vance Ginn in the Center for Fiscal Policy, and Economists Dr. Donald Bumpass and Dr. M. H. Tuttle in the Department of Economics and International Business at Sam Houston State University, co-authored the peer-reviewed academic article “Retail and Wholesale Gasoline Price Adjustments in Response to Oil Price Changes” published in the Energy Economics journal.

“Contrary to popular public opinion, our research finds that there are no differences in the responses of retail and wholesale gasoline prices to increases and decreases in oil prices in the long run,” said Ginn. “These results suggest that retailers and wholesalers of gasoline have little market power to significantly influence their prices.”
 
The article abstract states:

“This research examines the long-run relationship between the spot oil price and retail and wholesale gasoline prices. Recent research suggests that the response of the retail gasoline price is faster and the size of the change is larger, in magnitude, following a crude oil price increase compared with periods when the crude oil price is falling; however, some recent papers examining potential asymmetries present mixed results. Our results from a common threshold model estimating the adjustment of gasoline prices and the spot oil price suggest a long-run relationship between retail and wholesale gasoline prices and the crude oil price. Further, results here suggest that both retail and wholesale gasoline prices respond symmetrically to an oil price shock in the long run, indicating little market power by gas stations and wholesalers.”

The article can be read in its entirety here: http://authors.elsevier.com/a/1Ryg9_3DAZr~FW
 
To schedule an interview with Dr. Ginn, please contact Caroline Espinosa at cespinosa@texaspolicy.com or 512-472-2700.

Vance Ginn, Ph.D., is an Economist in the Center for Fiscal Policy at the Texas Public Policy Foundation.

The Texas Public Policy Foundation is a non-profit, free-market research institute based in Austin, Texas.

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