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Analysis of Asymmetry in Slovak Gasoline and Diesel Retail Market

In: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Rovinj, Croatia, 12-14 September 2019

Author

Listed:
  • Szomolányi, Karol
  • Lukáčik, Martin
  • Lukáčiková, Adriana

Abstract

In this paper we examine if Slovak retail gasoline and diesel prices respond more quickly when crude oil price rises rather than when it decreases. The error correction model with irreversible behaviour of explanatory variables is considered to be basic tool for the analysis of asymmetric retail price reaction of gasoline and diesel. The explanatory variable is divided into two variables, the positive and the negative differences implying a price increase and a price decrease. Due to the link between the gasoline and diesel markets, we assume a common co-integration relationship. Therefore, we also estimate vector error correction model in our analysis. The both model approaches reject expected asymmetry in the retail price reactions on crude oil changes.

Suggested Citation

  • Szomolányi, Karol & Lukáčik, Martin & Lukáčiková, Adriana, 2019. "Analysis of Asymmetry in Slovak Gasoline and Diesel Retail Market," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2019), Rovinj, Croatia, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Rovinj, Croatia, 12-14 September 2019, pages 359-366, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    • Handle: RePEc:zbw:entr19:207696
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    References listed on IDEAS

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    More about this item

    Keywords

    gasoline and diesel retail price research; irreversible model; cointegration; rockets and feathers;
    All these keywords.

    JEL classification:

    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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