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Is there an asymmetry in the response of diesel and petrol prices to crude oil price changes? Evidence from New Zealand
Ming-Hua Liu1; Dimitris Margaritis2; Alireza Tourani-Rad2
2010-01-11
Source PublicationEnergy Economics
ISSN0140-9883
Volume32Issue:4Pages:926-932
Abstract

This paper examines how pre-tax petrol and diesel prices in New Zealand respond to changes in crude oil prices using an asymmetric error correction model. Our results show that oil companies adjust diesel prices upwards faster than they adjust them downwards, and the difference is statistically significant. However we find no statistical evidence for an asymmetry in the adjustment of petrol prices even though the magnitude of estimated coefficients suggests a faster response to rising prices. As diesel pricing is not as competitive as petrol pricing, calls for further government actions and monitoring of the oil market may be justified. Our findings also have important implications for the conduct of monetary policy as the pass-through of crude oil price changes can affect cost-push inflation.

KeywordFuel Pricing Asymmetric Adjustment Price Rigidity Petrol Price Diesel Price
DOI10.1016/j.eneco.2009.12.008
Indexed BySCI
Language英语
WOS Research AreaBusiness & Economics
WOS SubjectEconomics
WOS IDWOS:000279644200020
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Citation statistics
Cited Times [WOS]:22   [WOS Record]     [Related Records in WOS]
Document TypeJournal article
CollectionFaculty of Business Administration
DEPARTMENT OF FINANCE AND BUSINESS ECONOMICS
Corresponding AuthorDimitris Margaritis
Affiliation1.Faculty of Business Administration, University of Macau, Macau
2.Faculty of Business, Auckland University of Technology, Auckland, New Zealand
First Author AffilicationFaculty of Business Administration
Recommended Citation
GB/T 7714
Ming-Hua Liu,Dimitris Margaritis,Alireza Tourani-Rad. Is there an asymmetry in the response of diesel and petrol prices to crude oil price changes? Evidence from New Zealand[J]. Energy Economics,2010,32(4):926-932.
APA Ming-Hua Liu,Dimitris Margaritis,&Alireza Tourani-Rad.(2010).Is there an asymmetry in the response of diesel and petrol prices to crude oil price changes? Evidence from New Zealand.Energy Economics,32(4),926-932.
MLA Ming-Hua Liu,et al."Is there an asymmetry in the response of diesel and petrol prices to crude oil price changes? Evidence from New Zealand".Energy Economics 32.4(2010):926-932.
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