Research Information System
6th Euro-Mediterranean Conference for Environmental Integration 2024 (EMCEI 2024), Marrakush, Morocco, 15 - 18 May 2024, (Summary Text)
Abstract
Purpose:
Psychological price has recently played an essential role in economic actors' decision-making process. The aim of this study is to investigate the effect of Psychological Prices on retail gasoline prices in Turkiye, a developing country grappling with inflationary challenges.
Methods: Pooled OLS and Panel Data Fixed Effects methods are applied. The raw daily data of retail prices of three big gasoline companies for 81 cities of Türkiye for the period January-2017 and August-2023 was obtained from Energy Market Regularity Authority of Türkiye and processed by the authors in a way which would serve the aim of the research.
Results: There is a negative relationship between 9-ending prices and gasoline prices, while a positive relationship exists between 0-ending prices and gasoline prices.
Interpretation: The results of this study are different from the results of studies in the empirical literature, which are based on the sample from developed countries. Our results do not support the Psychological Price Theory for Turkiye because of high inflation experienced during Covid-19 pandemic period.
Conclusion: Based on the daily data of retail prices of three big gasoline companies for 81 cities of Türkiye, we were able to suggest that 9-ending prices do not serve as signals to consumers in Turkiye and, therefore, do not influence purchasing behavior because of higher inflation.
Keywords: Psychological
Prices, Gasoline Stations, Developing and Inflationary Countries.