Geographical Dispersion of Consumer Search Behavior

Hakan Yilmazkuday

No 1705, Working Papers from Florida International University, Department of Economics

Abstract: This paper investigates whether consumer search behavior differs across zip codes within the U.S.. As an application, daily gasoline price data covering virtually all gas stations within the U.S. are employed to estimate the distribution of search costs in each zip code. The results show that there are significant differences across zip codes regarding the expected number of searches achieved before consumers purchase gasoline. In order to have a systematic explanation, such differences are further connected to geographic, demographic and economic conditions of the zip codes in a secondary analysis. The corresponding results imply several strategies for gas stations in order to maximize profits/markups; suggestions follow for policy makers and regulators to reduce redistributive effects of information barriers across locations.

Keywords: Consumer Search; Price Dispersion; Retail Gasoline (search for similar items in EconPapers)
JEL-codes: D12 D83 L81 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2017-04
New Economics Papers: this item is included in nep-com, nep-ene, nep-mkt, nep-tre, nep-upt and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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https://economics.fiu.edu/research/pdfs/2017_working_papers/1705.pdf First version, 2017 (application/pdf)

Related works:
Journal Article: Geographical dispersion of consumer search behaviour (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:fiu:wpaper:1705

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