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Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking
This study investigated the role of price elasticity in the asymmetric adjustment of global retail energy prices and in the rent-seeking behavior of retail energy firms. Overall, 58 nonlinear ARDL models were estimated for the period 2004:M12 – 2016M8 using data for gasoline, automotive diesel, dome...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Elsevier Ltd.
2020
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7547844/ https://www.ncbi.nlm.nih.gov/pubmed/33072521 http://dx.doi.org/10.1016/j.erss.2020.101783 |
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author | Ogbuabor, Jonathan E. Orji, Anthony Anthony-Orji, Onyinye I. |
author_facet | Ogbuabor, Jonathan E. Orji, Anthony Anthony-Orji, Onyinye I. |
author_sort | Ogbuabor, Jonathan E. |
collection | PubMed |
description | This study investigated the role of price elasticity in the asymmetric adjustment of global retail energy prices and in the rent-seeking behavior of retail energy firms. Overall, 58 nonlinear ARDL models were estimated for the period 2004:M12 – 2016M8 using data for gasoline, automotive diesel, domestic heating oil, industrial fuel oil and crude oil markets. The results indicate that global retail energy markets are still pervasively fraught with the problems of rockets and feathers effect and the likelihood of retailers manipulating the tax system to hide rent-seeking behaviors. The results also indicate that there is more likelihood of rent-seeking activities in the markets for road fuels whose demand is relatively more price-inelastic than in the markets for non-road fuels whose demand is relatively more price-elastic, thereby suggesting that differences in market structure could offer a possible explanation for rent-seeking and asymmetric price adjustment in global retail energy markets. These results have far-reaching antitrust and consumer welfare implications, which require regulators and policy makers to interminably monitor the global retail energy markets, especially during periods of economic crisis like the ongoing COVID-19 pandemic, in order to safeguard the overall social welfare. |
format | Online Article Text |
id | pubmed-7547844 |
institution | National Center for Biotechnology Information |
language | English |
publishDate | 2020 |
publisher | Elsevier Ltd. |
record_format | MEDLINE/PubMed |
spelling | pubmed-75478442020-10-13 Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking Ogbuabor, Jonathan E. Orji, Anthony Anthony-Orji, Onyinye I. Energy Res Soc Sci Article This study investigated the role of price elasticity in the asymmetric adjustment of global retail energy prices and in the rent-seeking behavior of retail energy firms. Overall, 58 nonlinear ARDL models were estimated for the period 2004:M12 – 2016M8 using data for gasoline, automotive diesel, domestic heating oil, industrial fuel oil and crude oil markets. The results indicate that global retail energy markets are still pervasively fraught with the problems of rockets and feathers effect and the likelihood of retailers manipulating the tax system to hide rent-seeking behaviors. The results also indicate that there is more likelihood of rent-seeking activities in the markets for road fuels whose demand is relatively more price-inelastic than in the markets for non-road fuels whose demand is relatively more price-elastic, thereby suggesting that differences in market structure could offer a possible explanation for rent-seeking and asymmetric price adjustment in global retail energy markets. These results have far-reaching antitrust and consumer welfare implications, which require regulators and policy makers to interminably monitor the global retail energy markets, especially during periods of economic crisis like the ongoing COVID-19 pandemic, in order to safeguard the overall social welfare. Elsevier Ltd. 2020-12 2020-10-10 /pmc/articles/PMC7547844/ /pubmed/33072521 http://dx.doi.org/10.1016/j.erss.2020.101783 Text en © 2020 Elsevier Ltd. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active. |
spellingShingle | Article Ogbuabor, Jonathan E. Orji, Anthony Anthony-Orji, Onyinye I. Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking |
title | Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking |
title_full | Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking |
title_fullStr | Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking |
title_full_unstemmed | Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking |
title_short | Are anticompetitive behaviours rampant in global retail energy markets? A study of price elasticity, asymmetric price adjustment and rent-seeking |
title_sort | are anticompetitive behaviours rampant in global retail energy markets? a study of price elasticity, asymmetric price adjustment and rent-seeking |
topic | Article |
url | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7547844/ https://www.ncbi.nlm.nih.gov/pubmed/33072521 http://dx.doi.org/10.1016/j.erss.2020.101783 |
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