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Understanding gasoline price dispersion

Demet Yilmazkuday and Hakan Yilmazkuday

The Annals of Regional Science, 2016, vol. 57, issue 1, No 9, 223-252

Abstract: Abstract This paper models and estimates the gasoline price dispersion across time and space by using a unique data set at the gas station level within the USA. Nationwide effects (measured by time fixed effects or crude oil prices) explain up to about 51 % of the gasoline price dispersion across stations. Refinery-specific costs, which have been ignored in the literature due to using local data sets within the USA, contribute up to another 33 % to the price dispersion. While state taxes explain about 12 % of the price dispersion, spatial factors such as local agglomeration externalities, land prices, and distribution costs of gasoline explain up to about 4 %. The contribution of brand-specific factors is relatively minor.

JEL-codes: L11 L81 R32 R41 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (14)

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DOI: 10.1007/s00168-016-0775-4

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