 Empirical investigation of retail fuel pricing: The impact of spatial interaction, competition and territorial factorsAngela Bergantino, Claudia Capozza and Mario Intini Energy Economics, 2020, vol. 90, issue C Abstract: This paper explores the determinants of fuel prices by proposing an empirical framework that integrates three kinds of influencing factors: spatial interaction, competition and territorial factors. For competition, we define a general variable, the presence of competing stations within a radius, and two specific variables, the presence of low-cost stations and the presence of same-brand stations. We proceed with a step-wise adjustment of the radius, by gradually increasing it, to evaluate the spatial scope of different competition effects. Using data on prices of fuel stations in Rome, Italy, we estimate spatial econometric models that provide evidence of spatial dependence in price between stations. We also find that competition affects prices, but the relevance of its impact depends on radius length. Finally, the territorial factors remarkably influence prices. If these factors are introduced in the model, the magnitude of spatial parameters weakens, allowing to accurately assess the intensity of spatial dependence. Keywords: Gasoline and diesel prices; Spatial interaction; Competition; Territorial factors (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:90:y:2020:i:c:s0140988320302164 DOI: 10.1016/j.eneco.2020.104876 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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