Have European gas prices converged?

The development of a single European market for gas has been a goal of EU policy makers since the Single European Act (SEA) of 1986. EU Directives of 1996 and 1998 put these aspirations into action. However, casual empiricism suggests that convergence may have begun before this. This paper investigates whether gas prices in Europe have converged since 1978. Using annual data, three empirical tests for convergence are applied to gas prices for six EU Member States; a simple test for β-convergence; a cointegration test; and Nahar and Inder's [2002. Testing convergence in economic growth for OECD countries. Applied Economics 34, 2011-2022] test. The results from two of these three tests suggest that convergence did occur for most of the countries in the sample over this period. © 2006 Elsevier Ltd. All rights reserved.