 The Supply Network and Price Dispersion in the Canadian Gasoline MarketReview of Network Economics, 2018, vol. 17, issue 2, 75-107 Abstract: This paper examines the impact of variation in transportation options – what I denote the “supply network” – on observed price differences between locations for a specific good, retail gasoline. I use a unique data set of weekly gasoline prices across 44 Canadian cities to analyze how the existence of variation in the available modes of transportation for gasoline between cities (via pipeline, marine tanker, rail or truck) accounts for observed price differences across locations. I find that the supply network is significant – cities connected by lower cost-per-unit methods like pipelines or seaports exhibit smaller mean- and weekly-price differences than those connected only by road or rail, after controlling for distance, regional effects and market size. A pipeline connection results in a reduction in weekly price dispersion equivalent to a 53% reduction in distance between cities, while a maritime connection has the equivalent effect of a 38% reduction in distance between cities. Keywords: price dispersion; spatial production and pricing analysis; supply networks; transportation economics (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:bpj:rneart:v:17:y:2018:i:2:p:75-107:n:3 Ordering information: This journal article can be ordered from Access Statistics for this article Review of Network Economics is currently edited by Lukasz Grzybowski More articles in Review of Network Economics from De Gruyter |
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