An Empirical Study of Asymmetric Pricing in Retail Gasoline and Diesel Markets in Taiwan, Japan, South Korea, and Singapore

Kuo-Wei Chou, Chin-Yuen Chang, Fei Hu

Abstract


This study estimated retail price adjustments in the gasoline and diesel markets of Taiwan, Japan, South Korea, and Singapore using monthly data between 2004M1 and 2012M6. An asymmetric error correction model (ECM) was employed as a framework and the results showed that asymmetric adjustments in retail gasoline and diesel prices are common, and that the adjustments, which quickly and obviously responded to cost reductions, are a type of politico-economic asymmetry. This finding differs from the results of numerous international studies. In other words, although gasoline and diesel markets are evident oligopolies, the government’s intervention behavior appears to control the gasoline and diesel price adjustments of the 4 East Asian countries evaluated in this study (i.e., Taiwan, Japan, South Korea, and Singapore).

Full Text: PDF DOI: 10.5430/ijfr.v4n3p35

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

International Journal of Financial Research
ISSN 1923-4023(Print) ISSN 1923-4031(Online)

 

Copyright © Sciedu Press

To make sure that you can receive messages from us, please add the 'Sciedu.ca' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.