New York Mark‐Ups on Petroleum Products
27 Pages Posted: 22 Feb 2012
Date Written: March 2012
In this paper we analyse rigidities in the behaviour of the mark‐up on regular, midgrade and premium varieties of petrol in the New York area using a set of weekly frequency data and a methodology that analyses the pricing process using deterministic and stochastic techniques. The results are consistent across methodologies and indicate that the speeds of adjustment to the long‐run equilibrium mark‐up differ across varieties of petrol with margins of the premium variety falling faster than they rise, contrary to the popular claim of welfare‐decreasing asymmetries in price transmission.
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