IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v32y2010i6p1291-1298.html
   My bibliography  Save this article

Estimating the impact of refinery outages on petroleum product prices

Author

Listed:
  • Kendix, Michael
  • Walls, W.D.

Abstract

We quantify the impact of refinery outages on petroleum product prices. The empirical analysis focuses on wholesale gasoline prices in the US using weekly data collected from January 2002 through September 2008, a period including many refinery outages. We match refinery unit output to specific wholesale gasoline markets, and then estimate panel data regressions to quantify the impact of refinery unit outages on wholesale gasoline prices while controlling for time-specific effects, city-specific effects, fuel-specific effects, refinery concentration, and other factors that could impact the price of refined petroleum products. The estimation results show that refinery outages have a statistically significant positive impact on refined product prices, and that the magnitude of this effect is larger for certain special fuel blends. Policy implications are discussed.

Suggested Citation

  • Kendix, Michael & Walls, W.D., 2010. "Estimating the impact of refinery outages on petroleum product prices," Energy Economics, Elsevier, vol. 32(6), pages 1291-1298, November.
    • Handle: RePEc:eee:eneeco:v:32:y:2010:i:6:p:1291-1298
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140-9883(10)00096-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    2. W.David Walls & Frank W. Rusco, 2007. "Price Effects of Boutique Motor Fuels: Federal Environmental Standards, Regional Fuel Choices, and Local Gasoline Prices," The Energy Journal, , vol. 28(3), pages 145-164, July.
    3. Brown, Jennifer & Hastings, Justine & Mansur, Erin T. & Villas-Boas, Sofia B., 2008. "Reformulating competition Gasoline content regulation and wholesale gasoline prices," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 1-19, January.
    4. Severin Borenstein & Andrea Shepard, 2002. "Sticky Prices, Inventories, and Market Power in Wholesale Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 33(1), pages 116-139, Spring.
    5. Christopher Taylor & Jeffrey Fischer, 2003. "A Review of West Coast Gasoline Pricing and the Impact of Regulations," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 10(2), pages 225-243.
    6. Severin Boreinstein & Andrea Shepard, 1996. "Dynamic Pricing in Retail Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 429-451, Autumn.
    7. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    8. Im, Kyung So & Pesaran, M. Hashem & Shin, Yongcheol, 2003. "Testing for unit roots in heterogeneous panels," Journal of Econometrics, Elsevier, vol. 115(1), pages 53-74, July.
    9. Rodney Paul & Dragan Miljkovic & Viju Ipe, 2001. "Market integration in US gasoline markets," Applied Economics, Taylor & Francis Journals, vol. 33(10), pages 1335-1340.
    10. Whitney K. Newey & Kenneth D. West, 1994. "Automatic Lag Selection in Covariance Matrix Estimation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 61(4), pages 631-653.
    11. Joris Pinkse & Margaret E. Slade & Craig Brett, 2002. "Spatial Price Competition: A Semiparametric Approach," Econometrica, Econometric Society, vol. 70(3), pages 1111-1153, May.
    12. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-838, May.
    13. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    14. Godfrey, Leslie G., 1978. "Testing for multiplicative heteroskedasticity," Journal of Econometrics, Elsevier, vol. 8(2), pages 227-236, October.
    15. Adrian R Pagan & Anthony D Hall, 1983. "Diagnostic tests as residual analysis," Published Paper Series 1983-1, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    16. Douglas Staiger & James H. Stock, 1997. "Instrumental Variables Regression with Weak Instruments," Econometrica, Econometric Society, vol. 65(3), pages 557-586, May.
    17. Evans, William N & Froeb, Luke M & Werden, Gregory J, 1993. "Endogeneity in the Concentration-Price Relationship: Causes, Consequences, and Cures," Journal of Industrial Economics, Wiley Blackwell, vol. 41(4), pages 431-438, December.
    18. Koenker, Roger, 1981. "A note on studentizing a test for heteroscedasticity," Journal of Econometrics, Elsevier, vol. 17(1), pages 107-112, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Saeed Shavvalpour & Hossein Khanjarpanah & Farhad Zamani & Armin Jabbarzadeh, 2017. "Petrochemical Products Market and Stock Market Returns: Empirical Evidence from Tehran Stock Exchange," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 21(2), pages 383-403, Spring.
    2. Kaufmann, Robert K. & Schroer, Colter, 2023. "Social and environmental events disrupt the relation between motor gasoline prices and market fundamentals," Energy Economics, Elsevier, vol. 126(C).
    3. Bin Li & Mohan Venkatachalam, 2022. "Leveraging Big Data to Study Information Dissemination of Material Firm Events," Journal of Accounting Research, Wiley Blackwell, vol. 60(2), pages 565-606, May.
    4. Holmes, Mark J. & Otero, Jesús & Panagiotidis, Theodore, 2013. "On the dynamics of gasoline market integration in the United States: Evidence from a pair-wise approach," Energy Economics, Elsevier, vol. 36(C), pages 503-510.
    5. Ederington, Louis H. & Fernando, Chitru S. & Hoelscher, Seth A. & Lee, Thomas K. & Linn, Scott C., 2019. "Characteristics of petroleum product prices: A survey," Journal of Commodity Markets, Elsevier, vol. 14(C), pages 1-15.
    6. Zavaleta, Armando & Walls, W.D. & Rusco, Frank W., 2015. "Refining for export and the convergence of petroleum product prices," Energy Economics, Elsevier, vol. 47(C), pages 206-214.
    7. Xinming Du, 2023. "Symptom or Culprit? Social Media, Air Pollution, and Violence," CESifo Working Paper Series 10296, CESifo.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kendix, Michael & Walls, W.D., 2010. "Oil industry consolidation and refined product prices: Evidence from US wholesale gasoline terminals," Energy Policy, Elsevier, vol. 38(7), pages 3498-3507, July.
    2. Guilhem Bascle, 2008. "Controlling for endogeneity with instrumental variables in strategic management research," Post-Print hal-00576795, HAL.
    3. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
    4. Walls, W.D. & Rusco, Frank & Kendix, Michael, 2011. "Biofuels policy and the US market for motor fuels: Empirical analysis of ethanol splashing," Energy Policy, Elsevier, vol. 39(7), pages 3999-4006, July.
    5. repec:eco:journ1:2014-03-08 is not listed on IDEAS
    6. Wooldridge, Jeffrey M., 1990. "A Unified Approach to Robust, Regression-Based Specification Tests," Econometric Theory, Cambridge University Press, vol. 6(1), pages 17-43, March.
    7. Bilal Mehmood & Parvez Azim & Syed Hassan Raza & Huma Sohaib, 2014. "Labor Productivity, Demographic Traits and ICT A Demo-Tech Productivity Model for Asian Region," International Journal of Economics and Financial Issues, Econjournals, vol. 4(4), pages 773-783.
    8. Michael O'Connor Keefe & David Gallagher, 2014. "Does the effect of revealed private information on initial public offering (IPO) first trading day return differ by IPO market heat?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 54(3), pages 921-964, September.
    9. Russell Davidson & Victoria Zinde‐Walsh, 2017. "Advances in specification testing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1595-1631, December.
    10. Dufour, Jean-Marie & Khalaf, Lynda & Bernard, Jean-Thomas & Genest, Ian, 2004. "Simulation-based finite-sample tests for heteroskedasticity and ARCH effects," Journal of Econometrics, Elsevier, vol. 122(2), pages 317-347, October.
    11. Jeffrey M. Woodridge, 1988. "A Unified Approach to Robust, Regression-Based Specification Tests," Working papers 480, Massachusetts Institute of Technology (MIT), Department of Economics.
    12. Wooldridge, Jeffrey M., 1991. "On the application of robust, regression- based diagnostics to models of conditional means and conditional variances," Journal of Econometrics, Elsevier, vol. 47(1), pages 5-46, January.
    13. Dastoor, Naorayex K., 1997. "Testing for conditional heteroskedasticity with misspecified alternative hypotheses," Journal of Econometrics, Elsevier, vol. 82(1), pages 63-80.
    14. Petter Lundborg, 2007. "Smoking, information sources, and risk perceptions—New results on Swedish data," Journal of Risk and Uncertainty, Springer, vol. 34(3), pages 217-240, June.
    15. Grammenos, Costas Th. & Papapostolou, Nikos C., 2012. "US shipping initial public offerings: Do prospectus and market information matter?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(1), pages 276-295.
    16. Troeger, Vera, 2012. "De Facto Capital Mobility, Equality, and Tax Policy in Open Economies," CAGE Online Working Paper Series 84, Competitive Advantage in the Global Economy (CAGE).
    17. Johan Lundberg & Sofia Lundberg, 2012. "Distributional Effects of Lower Food Prices in a Rich Country," Journal of Consumer Policy, Springer, vol. 35(3), pages 373-391, September.
    18. Ali, Mubarik & Farooq, Umar, 2004. "Dietary Diversity And Rural Labor Productivity: Evidence From Pakistan," 2004 Annual meeting, August 1-4, Denver, CO 20310, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. MacKinnon, James G, 1992. "Model Specification Tests and Artificial Regressions," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 102-146, March.
    20. repec:wsr:wpaper:y:2010:i:057 is not listed on IDEAS
    21. Marijke Verpoorten & Lode Berlage, 2004. "Genocide and land scarcity: Can Rwandan rural households manage?," CSAE Working Paper Series 2004-15, Centre for the Study of African Economies, University of Oxford.
    22. Olivier Damette & Philippe Delacote, 2009. "The environmental resource curse hypothesis : the forest case [L'hypothèse de malédiction environnemental des ressources : le cas des forêts]," Working Papers hal-01189378, HAL.

    More about this item

    Keywords

    Refinery outages Gasoline prices Boutique fuels;

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:32:y:2010:i:6:p:1291-1298. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.