Locational choice and price competition: Some empirical results for the Austrian retail gasoline market

Gerhard Clemenz and Klaus Gugler ()
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Klaus Gugler: https://econ.univie.ac.at

Vienna Economics Papers from University of Vienna, Department of Economics

Abstract: Using data from the Austrian retail gasoline market we test the following two hypotheses derived from spatial economics: (i) Retail shops are more densely located in areas with a higher population density. (ii) Spatial competition equilibrium prices are decreasing in the density of seller locations. Both hypotheses are well supported by the data. Population density explains more than 95% of the cross-district variation in the density of gasoline stations. With respect to the relationship between prices and gas station density the coefficient has the predicted sign and is significant at the 5% level or better in all specifications. Estimation as simultaneous equations does not alter our conclusions, and suggests causality running from station density to price.

JEL-codes: L1 L13 L81 (search for similar items in EconPapers)
Date: 2002-04
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Related works:
Chapter: Locational choice and price competition: some empirical results for the austrian retail gasoline market (2009)
Journal Article: Locational choice and price competition: some empirical results for the austrian retail gasoline market (2006)
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