Customer-Employee Substitution: Evidence from Gasoline Stations

Abstract

We document the adoption of self-service pumps in U.S. gasoline stations from 1977 to 1992. Using establishment-level data from the Census of Retail Trade over this period, we show that self-service stations employ approximately one quarter fewer attendants per pump, all else equal. The work done by these attendants has shifted to customers, biasing upwards conventional measures of productivity growth.

Keywords: Customer-employee substitution, retail, gasoline station, self service, full service, outsourcing

JEL Classification: D22, D24, J23, L81