Self-Service Bans and Gasoline Prices: The Effect of Allowing Consumers to Pump Their Own Gas

20 Pages Posted: 6 Apr 2022

See all articles by Vitor Melo

Vitor Melo

Clemson University; Mercatus Center; Initiative on Enabling Choice and Competition at the University of Chicago

Date Written: March 22, 2022

Abstract

Most of the world's population lives in countries that ban the self-service sale of gasoline. Causal effects of this regulation can hardly be assessed in these countries due to a lack of policy changes, but a recent quasi-experiment in the state of Oregon allows us to analyze the impact of the ban. From 1992 to 2017, the state of Oregon was one of two US states that banned self-service at gasoline stations. Oregon adjusted regulations at the start of 2018 to allow self-service at gasoline stations in counties with populations below 40,000 individuals. I examine the repeal of this self-service ban and its effects on gasoline prices. I apply a difference-in-differences design using high frequency data of gasoline prices and find that repealing the self-service ban reduced gasoline prices by 4.4 cents per gallon in affected Oregon counties. This effect represents approximately $90 in expected annual savings for a household with three licensed drivers. The results are statistically significant in all specifications and are essential to the policy debate on whether to keep self-service bans in U.S. states and countries with the same regulation.

Keywords: Regulation, Gasoline Markets, Supply Constraints

JEL Classification: L51, L22, O25

Suggested Citation

Melo, Vitor, Self-Service Bans and Gasoline Prices: The Effect of Allowing Consumers to Pump Their Own Gas (March 22, 2022). Available at SSRN: https://ssrn.com/abstract=4064061 or http://dx.doi.org/10.2139/ssrn.4064061

Vitor Melo (Contact Author)

Clemson University ( email )

Clemson, SC 29631
United States

Mercatus Center ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

Initiative on Enabling Choice and Competition at the University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
236
Abstract Views
1,670
Rank
221,899
PlumX Metrics