Understanding Gasoline Price Dispersion

48 Pages Posted: 4 Apr 2012 Last revised: 22 Nov 2016

Demet Yilmazkuday

Florida International University

Hakan Yilmazkuday

Florida International University (FIU) - Department of Economics

Date Written: May 26, 2016

Abstract

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.

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

JEL Classification: L11, L81, R32, R41

Suggested Citation

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

Demet Yilmazkuday

Florida International University ( email )

Miami, FL 33199
United States

Hakan Yilmazkuday (Contact Author)

Florida International University (FIU) - Department of Economics ( email )

11200 SW 8th Street
Miami, FL 33199
United States

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