Understanding Gasoline Price Dispersion

Demet Yilmazkuday

Florida International University

Hakan Yilmazkuday

Florida International University

May 26, 2016

This paper models and estimates the gasoline price dispersion across time and space by introducing and using a unique gasoline price 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 followed by the contributions of refinery-specific costs up to about 33% (which have been ignored in the literature due to using local data sets), state taxes about 12%, and spatial factors (such as local agglomeration externalities, land prices, distribution costs of gasoline) up to about 4%. The contribution of brand-specific factors are relatively minor.

Number of Pages in PDF File: 48

Keywords: Gasoline Prices, Gas-Station Level Analysis, Nighttime Lights, Land Prices, the United States

JEL Classification: L11, L81, R32, R41

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Date posted: April 4, 2012 ; Last revised: May 27, 2016

Suggested Citation

Yilmazkuday, Demet and Yilmazkuday, Hakan, Understanding Gasoline Price Dispersion (May 26, 2016). Available at SSRN: http://ssrn.com/abstract=2034478 or http://dx.doi.org/10.2139/ssrn.2034478

Contact Information

Demet Yilmazkuday
Florida International University ( email )
Miami, FL 33199
United States
Hakan Yilmazkuday (Contact Author)
Florida International University ( email )
11200 SW 8th Street
Miami, FL 33199
United States
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