Title
An econometric analysis of retail gasoline prices in a border metropolitan economy
Publication Date
11-1-2015
Publication Name
North American Journal of Economics and Finance
Volume
34
First Page
450
Last Page
461
Source Full Text URL
https://doi.org/10.1016/j.najef.2015.09.005
Document Type
Article
DOI
10.1016/j.najef.2015.09.005
Abstract
© 2015 Elsevier Inc. Previous studies show that a variety of different variables influence retail gasoline price fluctuations. In the case of El Paso, Texas, those variables would include wholesale gasoline prices, local economic conditions, weather, and, more uniquely, cross-border economic variables associated with Ciudad Juarez, Chihuahua, in Mexico. To analyze the contributions of these variables to monthly price movements for gasoline in El Paso, a theoretical model is specified. From the latter construct, a reduced-form equation is extracted. That specification is then expressed within an error correction framework to allow accounting for both long-run and short-run behaviors in this metropolitan economy. Results indicate that the border poses a fairly substantial barrier to normal trade and purchasing patterns for this product within this specific region.