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Price differences within retail gasoline markets

Author

Listed:
  • Hurtado, Carlos
  • González, Julia

Abstract

This paper characterizes fueling stations' pricing strategies to study price differentials within retail gasoline markets. We use a unique dataset with stations' locations and daily gasoline prices in the major cities of the continental U.S. to classify cycler and non-cycler stations. We exploit station-level variability in pricing behavior within retail gasoline markets to show that cyclers charge about 3.5¢ lower gasoline prices than non-cyclers, on average. Additionally, we confirm an almost biweekly duration of the station-level cycling behavior. Finally, we provide evidence of the relationship between consumer search and the intra-market pricing strategy heterogeneity.

Suggested Citation

  • Hurtado, Carlos & González, Julia, 2024. "Price differences within retail gasoline markets," Energy Economics, Elsevier, vol. 133(C).
    • Handle: RePEc:eee:eneeco:v:133:y:2024:i:c:s0140988324002093
    DOI: 10.1016/j.eneco.2024.107501
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    More about this item

    Keywords

    Retail gasoline markets; Firm strategy; Edgeworth cycles;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis

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