Pass-Through of Own and Rival Cost Shocks: Evidence from the US Fracking Boom

• 成果类型: Article
• 署名作者: Muehlegger, Erich; Sweeney, Richard L.
• 署名单位: University of California System; University of California Davis; National Bureau of Economic Research; Boston College
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01052
• 发表日期: 2022-11
• 页码: 1361-1369
• 关键词: pricing-to-market; prices

摘要

In imperfectly competitive settings, a firm's price depends on its own costs as well as those of its competitors. We demonstrate that this has important implications for the estimation and interpretation of pass-through. Leveraging a large input cost shock resulting from the fracking boom, we isolate price responses to firm-specific, regional, and industry-wide input cost shocks in the U.S. oil refining industry. The pass-through of these components varies from near zero to full pass-through, reconciling seemingly disparate results from the literature. We illustrate the policy implications of rival cost pass-through in the context of a tax on refinery carbon emissions.