Essays on refining markets and environmental policy

dc.contributor.advisorThille, Henry
dc.contributor.advisorStengos, Thanasis
dc.contributor.advisorRamirez, Donna
dc.contributor.authorOladunjoye, Olusegun Akintunde of Economics Resource and Environmental Economyen_US of Guelphen_US of Philosophyen_US
dc.description.abstractThis thesis is comprised of three essays. The first two essays examine empirically the relationship between crude oil price and wholesale gasoline prices in the U.S. petroleum refining industry while the third essay determines the optimal combination of emissions tax and environmental research and development (ER&D) subsidy when firms organize ER&D either competitively or as a research joint venture (RJV). In the first essay, we estimate an error correction model to determine the effects of market structure on the speed of adjustment of wholesale gasoline prices, to crude oil price changes. The results indicate that market structure does not have a strong effect on the dynamics of price adjustment in the three regional markets examined. In the second essay, we allow for inventories to affect the relationship between crude oil and wholesale gasoline prices by allowing them to affect the probability of regime change in a Markov-switching model of the refining margin. We find that low gasoline inventory increases the probability of switching from the low margin regime to the high margin regime and also increases the probability of staying in the high margin regime. This is consistent with the predictions of the competitive storage theory. In the third essay, we extend the Industrial Organization R&D theory to the determination of optimal environmental policies. We find that RJV is socially desirable. In comparison to competitive ER&D, we suggest that regulators should encourage RJV with a lower emissions tax and higher subsidy as these will lead to the coordination of ER&D activities and eliminate duplication of efforts while firms internalize their technological spillover externality.en_US
dc.publisherUniversity of Guelphen_US
dc.rights.licenseAll items in the Atrium are protected by copyright with all rights reserved unless otherwise indicated.
dc.subjectrefining marketsen_US
dc.subjectenvironmental policyen_US
dc.subjectcrude oil pricesen_US
dc.subjectwholesale gasoline pricesen_US
dc.subjectemissions taxen_US
dc.titleEssays on refining markets and environmental policyen_US


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