Price dispersion and station heterogeneity on German retail gasoline markets

Justus Haucap, Ulrich Heimeshoff and Manuel Siekmann

No 171, DICE Discussion Papers from Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Abstract: Price levels and movements on gasoline and diesel markets are heavily debated among consumers, policy-makers, and competition authorities alike. In this paper, we empirically investigate how and why price levels differ across gasoline stations in Germany, using eight months of data from a novel panel data set including price quotes from virtually all German stations. Our analysis specifically explores the role of station heterogeneity in explaining price differences across gasoline stations. Key determinants of price levels across fuel types are found to be ex-refinery prices as key input costs, a station's location on roads or highway service areas, and brand recognition. A lower number of station-specific services implies lower fuel price levels, so does a more heterogeneous local competitive environment.

Keywords: Gasoline Pricing; Price Dispersion; Fuel Prices; Gasoline Stations (search for similar items in EconPapers)
JEL-codes: L11 L71 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-ene, nep-ind, nep-mkt, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:dicedp:171

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