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Title: Modelling the Price of Unleaded Petrol in Australia's Capital Cities
Contributor(s): Valadkhani, Abbas  (author)
Publication Date: 2010
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Abstract: This paper examines the long-run and short-run determinants of unleaded petrol price in Australia's capital cities using monthly data to find out whether prices respond asymmetrically to external shocks. Based on the cointegration test results and the estimated asymmetric short-run dynamic models, it is found that: (1) in the long-run petrol prices are mainly determined by Tapis crude oil and Singapore petrol prices; (2) there is some evidence of asymmetric price adjustments in the short-run since petrol price increases have been mostly passed on to the consumer faster than price decreases in four capital cities. More specifically, this paper provides convincing evidence in support of asymmetric price adjustments and the "rockets-and-feathers hypothesis" in Adelaide, Brisbane, Melbourne and Sydney. One can thus argue that there are a significant degree of market inefficiency and/or collusion, requiring a closer government price monitoring and scrutiny.
Publication Type: Journal Article
Source of Publication: Australasian Accounting Business and Finance Journal, 4(2), p. 19-38
Publisher: University of Wollongong
Place of Publication: Australia
ISSN: 1834-2000
Field of Research (FOR): 140217 Transport Economics
150314 Small Business Management
140209 Industry Economics and Industrial Organisation
Socio-Economic Outcome Codes: 900204 Wholesale and Retail Trade
Peer Reviewed: Yes
HERDC Category Description: C1 Refereed Article in a Scholarly Journal
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Appears in Collections:Journal Article
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