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Understanding Gasoline Price Dispersion

Demet Yilmazkuday and Hakan Yilmazkuday

No 1602, Working Papers from Florida International University, Department of Economics

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 U.S.. 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 U.S., 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, distribution costs of gasoline explain up to about 4%. The contribution of brand-specific factors is relatively minor.

Keywords: Gasoline Prices; Gas-Station Level Analysis; Nighttime Lights; Land Prices; the United States (search for similar items in EconPapers)
JEL-codes: L11 L81 R32 R41 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2016-06
New Economics Papers: this item is included in nep-agr, nep-com, nep-ene, nep-geo, nep-ind, nep-mkt, nep-tre and nep-ure
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Citations: View citations in EconPapers (13)

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https://economics.fiu.edu/research/pdfs/2016_working_papers/1602.pdf First version, 2016 (application/pdf)

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