Tuesday, July 17, 2012
Posted by D. Daniel Sokol
Ralf Dewenter, University of Dusseldorf and Ulrich Heimeshoff, University of Dusseldorf analyze Less pain at the pump? The effects of regulatory interventions in retail gasoline markets.
ABSTRACT: Increasing price levels, high price volatility and the suspicion of collusive behavior are important topics of public debates on competition in retail gasoline markets in many countries. Several governments and competition authorities introduced fuel price regulations in form of restrictions on the frequencies of fuel price changes per day. We present empirical evidence of the effects of fuel price regulation in Austria and Western Australia using difference-in-differences methods to estimate treatment effects of the implementation of such pricing rules. Our estimates provide evidence that fuel price levels in Austria decreased after implementation of regulation. However, we cannot find robust significant effects of regulation on fuel price levels in Western Australia.