On the dynamics of gasoline market integration in the United States: Evidence from a pair-wise approach

摘要: Abstract This paper employs a pair-wise approach to examine regional integration in the US gasoline market. Using price data at state level over period of more than two decades, we find strong support for view that law one holds markets, as 80% bivariate differentials turn out be stationary. Furthermore, uncover evidence speed which prices converge long-run equilibrium depends upon distance between states. Asymmetries are also present this relationship. Our findings suggest similar states with respect taxation, gas stations and refining capacity, faster is adjustment towards equilibrium.