The Shape and Frequency of Edgeworth Price Cycles in an Australian Retail Gasoline Market
39 Pages Posted: 26 Feb 2010
Date Written: February 24, 2010
Gasoline prices in many markets follow a saw-toothed pattern known as an Edgeworth Cycle. Lewis (2009) introduces a novel way of measuring the shape of the cycle, the median change in price, and regresses this against a number of explanatory variables in US markets. Here, we undertake a similar regression analysis, but using data from Perth, Australia, and with a novel measure of market structure as a regressor. We also explore a novel measure, based on spectral analysis, of the use of cycles in a mixed strategy, and the factors which drive this use.
Keywords: Edgeworth Cycles, retail gasoline
JEL Classification: C65, L13, L81
Suggested Citation: Suggested Citation