Assessing the Degree of Spot Market Integration for US Natural Gas: Evidence from Daily Price Data

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Date

Feb. 28, 2006

Authors

John Cuddington and Zhongmin Wang

Publication

Journal Article

Reading time

1 minute

This paper assesses the degree of market integration in the U.S. natural gas market following the FERC’s ‘open access’ reforms. Daily spot prices at 76 market locations from 1993 to 1997 are used to examine the geographic extent of the market and the speed with which market forces move prices toward equilibrium in the face of ongoing price shocks. The empirical results suggest that the East and Central regions form a highly integrated market, but that this market is quite segmented from the more loosely integrated Western market.

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Topics

Authors

John Cuddington

Zhongmin Wang

Fellow

Zhongmin Wang

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