Energy Economics · 1984 · 11 citations · 0 references
The objectives of the study described are to develop a gasoline market model and to test impirically the disequilibrium features of the market caused by either imperfect price adjustments or institutional price constraints. Disequilibrium maximum-likelihood estimation methods are used and the estimates indicate that price adjustments lag behind the magnitude required to achieve full adjustment in the gasoline market. If the disequilibrium hypothesis is acceptable, failure to take disequilibrium characteristics into account may create serious specification error and thus using previously obtained equilibrium estimates as a basis for pricing policy implementation may be misleading. (TRRL)