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Should I buy here, or keep driving? The effect of geographic market density on retail gas prices

by Schultheis, Amy , Johnson, Daniel K. N., Lybecker, Kristina M., Nadar, Devin

Abstract

The effect of spatial factors on competition and the price of gasoline have been sparsely explored by previous studies. Existing work examines how gasoline prices differ based on distance from the distribution site as well as how cost factors influence gasoline prices. Using market data from six midsized U.S. metro areas with similar isolation from neighboring retail markets, this paper examines the effects of location on retail price, while controlling for brand effects. Spatial regression analysis accommodates the potential of spatially correlated errors, and sensitivity analysis tests for several measures of retail location concentration. Results point to reproducible brand premiums and some location-based price differences, but also show the counterintuitive finding that areas with more market competition do not show significantly lower retail gas prices.

Note

Acquired from Department of Economics and Business. Saved as PDF/a1.4.

Administrative Notes

Acquired from Department of Economics and Business. Saved as PDF/a1.4.

Copyright
Copyright restrictions apply. Contact the author for permission to publish.
Publisher
None
PID
coccc:6600
Digital Origin
born digital
Extent
17 pages : illustrations