Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/246290 
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 1920
Publisher: 
Johannes Kepler University of Linz, Department of Economics, Linz
Abstract: 
We investigate how consumer information affects price adjustment in the Austrian retail gasoline market. Our measure of consumer information is obtained from detailed census data on commuting behavior, as commuters can freely sample prices on their commuting route and are thus better informed about prices. A threshold error-correction model suggests that prices adjust more quickly if cost shocks exceed certain thresholds. Parametric and semi-parametric regressions show that a larger share of informed consumers increases both transmission speed and pass-through elasticity. Better informed consumers reduce the asymmetry in thresholds, but have no effect on the asymmetry in the speed of adjustment.
Subjects: 
Price Transmission
Consumer Information
Commuters
Gasoline Market
Threshold Error-Correction Mode
JEL: 
D43
D83
L13
Document Type: 
Working Paper

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