This thesis presents an analysis of the pricing behaviour of firms in Canadian retail gasoline markets. The time series of retail prices for certain Canadian cities can be categorized as exhibiting one of two distinct patterns. In many cities, retail prices remain unchanged for many weeks at a time, despite frequent changes to the wholesale gasoline price. In other cities, retail prices cycle, increasing sharply, and declining more slowly. This thesis addresses questions arising from the observation of these patterns. The first essay considers a theoretical model of price setting behavior, and asks whether the number of stations operated by each firm in a market can determine whether constant prices or price cycles are observed. Constant prices are found to exist only when firms are of similar size. On the other hand, cycle equilibria can be constructed when the firms are of similar size, but also when their sizes differ greatly. Evidence of a negative relationship between price stability and the presence of small firms is also found through an examination of a panel data set of retail prices for a number of Canadian cities. The second essay examines the response of retail prices to wholesale price movements in the presence of a retail price cycle. A simple model based on the predictions of the theory is constructed, and estimated using data for the city of Windsor, Ontario. I find that a new cycle is initiated by a price increase whenever the distance between the previous retail price and the current wholesale price becomes sufficiently small. In addition, retail prices are found to be more responsive to wholesale prices over the increasing portion of the cycle. Finally, when the asymmetric error correction model of Borenstein, Cameron, and Gilbert (1997) is estimated, a more rapid response to wholesale price increases than to decreases is indicated. This asymmetry is shown to be consistent with my structural model, which thus provides an additional potential explanation for the regularities found in previous studies. / Arts, Faculty of / Vancouver School of Economics / Graduate

A wholesale beef futures contract has been suggested as a possible solution to recent problems in live cattle futures. However, it is uncertain whether the new futures contract will outperform the existing contract. In this research, I develop methods to derive a price series that is theoretically sound for a hypothetical futures contract. This allows for the evaluation of this hypothetical wholesale beef futures contract. I test these methods for validity using futures markets for hogs and find that they are similar in accuracy to a futures valuation model for existing futures. Then I derive a price series for this hypothetical wholesale beef futures contract and evaluate its effectiveness as a risk management tool.

Call number: LD2668 .T4 1932 H41

published_or_final_version / abstract / Business / Doctoral / Doctor of Philosophy

published_or_final_version / abstract / Statistics and Actuarial Science / Master / Master of Philosophy

Eutrophication is the accelerated aging process of a lake which generally decreases the water quality in terms of aesthetic and recreational uses. At Liberty Lake, near Spokane, Washington, eutrophication has become a problem. Many individuals and agencies are interested in the benefits that occur when the lake's water quality has improved. In this research the benefits to private property owners were measured at Liberty Lake. Three methods — present sales, appraised value and personal interview — were compared and empirically tested to determine the economic benefits to private property owners as well as the overall community impact. For this study property was defined as land, buildings and other improvements. Current market sales and appraised values at six different lakes, each with different water quality levels, were used as the dependent variables for the present sales and appraised value methods. The dependent variables were regressed against several factors including physical (.housing, neighborhood, accessibility, and environmental characteristics) to estimate the effect water quality had on property values. A quadratic and double logarithmic function were examined. In the results a positive relationship was found between water quality and the dependent variables. A 100 percent increase in the water quality ranking resulted in a $3,800 increase in the sales price per lot and $884 increase in the appraised value per lot for the quadratic function. Separate equations were determined for vacant lots. The dependent variables were the same, but only neighborhood, accessibility and environmental characteristics were used to estimate the effect water quality had on property values. In the quadratic form with a 100 percent increase in the water quality ranking, sales price increased $556 per lot and appraised value increased $782 per lot. In the personal interview method home owners at Liberty Lake were interviewed and asked for how much they would be willing to buy and sell a particular home at different water quality levels. The differences between the two buying and selling prices were the estimated impact of a change in water quality and totaled $4,795 and $5,679, respectively. Both differences were significant at the one percent level. The buying price difference was used when comparing the personal interview method to the other methods, since it was less likely to overestimate the water quality effect. This research used the best water quality index available, but there is a definite need for future research to develop a uniform water quality index. / Graduation date: 1980

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