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Regional Gasoline Price Change Kristal Chin, Heather Coleman, Yuyuan Liu, Karen McNeany, David Parker, Laura Pomella, Yongyang Yu Question • Are gasoline prices different across the country ? • Ho(1): 1993–2005 prices are regionally equivalent • Ha (1): West Coast prices have been higher than in other regions of the U.S. • Ho(2): 1993–2005 prices change at the same rate • Ha (2): West Coast prices have increased more quickly than in other regions of the U.S. Data Set • U.S. Department of Energy (EIA) • U.S. Regular Weekly Retail gas prices from April 1993 – November 2005 • Country divided into eight regions for analyses Data Set Regional Gasoline Prices from April 1993 to November 2005 350 Gasoline prices (cents per gallon) East Coast 300 New England Central Atlantic Lower Atlantic 250 Midwest Gulf Coast Rocky Mountain West Coast 200 150 100 50 1 51 101 151 201 251 301 351 401 Time index (weeks) 451 501 551 601 651 Data Set Gasoline Price Histograms 200 Series: WESTCOAST Sample 1 660 Observations 655 80 60 40 150 Mean Median Maximum 100 Minimum Std. Dev. Skewness Kurtosis 50 Jarque-Bera Probability 20 148.0446 137.7000 297.4000 102.5000 36.08569 1.619988 5.759430 494.3039 0.000000 Series: AVGWOWEST Sample 1 659 Observations 659 200 Series: WESTCOAST Sample 1 660 Observations 655 150 Mean 148.0446 Median 137.7000 Maximum 297.4000 100 Minimum 102.5000 Std. Dev. 36.08569 Skewness 1.619988 Kurtosis 5.759430 50 Mean Median Maximum Minimum Std. Dev. Skewness Kurtosis 135.1150 123.5000 310.6714 89.68571 35.66161 1.718967 6.556075 Jarque-Bera Probability 671.7699 0.000000 Serie Samp Obse Mean Media Maxim Minim Std. D Skew Kurto 0 200 220 240 260 280 300 Jarque-Bera 494.3039 80 100 120 140 160 180 200 220 240 260 280 300 320 0 100 120 140 160 180 200 220 240 260 280 300 West Coast Probability 0.000000 0 80 100 120 140 160 180 200 220 240 260 280 300 320 Average of Other Regions Jarqu Proba Statistics 1. F - tests determine whether variances of prices on the West Coast and each other region are equivalent • The p - value for each F - test was > 0.05 2. Two sample t - tests determine whether West Coast prices are equivalent to each of the other regions • The p - value for each t - test was <<< 0.05 3. Dummy variable ANOVA tests (1) including West Coast and (2) using C instead to represent it • Coefficients are significantly different, and therefore the West Coast has higher prices Data Set Linear Regression of Gasoline Price Change Gasoline prices (cents per gallon) Regional Gasoline Prices from Apr. 2003 to Nov. 2005 350 West Coast Other Regions 300 250 200 West : 150 y = 0.1473x + 99.216 R2 = 0.6008 100 Other (avg) : y = 0.1459x + 86.966 2 R = 0.6067 50 0 100 200 300 400 Time index (weeks) 500 600 Statistics 1.2 and Whisker Plot compares the regional Box Series1 1 rates of gasoline price increase 0.8 0.6Gulf Rocky Mountains Coast 0.4 West Coast New England 0.2 0 0.135 0.1375 0.14 0.1425 0.145 0.1475 0.15 0.1525 0.155 0.1575 Cents/Gallon Week Index Mean Price Conclusions 1. Every region of the U.S. has statistically significantly lower gasoline prices than the West Coast region 2. The prices on the west coast increase more quickly than the average of all other regions, but not statistically significantly