The asymmetric effect of gasoline price on consumer prices: An evidence from the Vietnamese market

Abstract

Gasoline price is closely related to macroeconomic variables. This relationship has been interested in over the last decades by policymakers. So far, there have been many studies on the linear relationship between gasoline price and consumer prices, but little is known regarding the nonlinear interactions between them. The objective of this paper is to analyze the asymmetric effect of petrol prices on consumer prices in the Vietnamese market. The theoretical basis is developed from the theory of asymmetric price transmission (APT). The quarterly data is collected between Q1/2008 and Q4/2019, and the nonlinear autoregressive distributed lag (NL-ARDL) model is used as an analytical tool. The research results indicate that the gasoline price in the Vietnam market disproportionately affects consumer prices in both the short-run and long-term.