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Gasoline Pricing in the Country and the City

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  • David P. Byrne

    (The University of Melbourne)

Abstract

In many markets, prices adjust quickly when costs rise, yet adjust sluggishly when costs fall. Such asymmetric pricing has received particular attention in retail gasoline where larger asymmetry has been related to greater market power. Using novel data from urban and rural gasoline markets, I document new evidence on this relationship by providing the first estimates of asymmetric pricing from rural towns. I find substantial asymmetry in these markets, show that local market concentration is positively related to asymmetry, and highlight the potential role of role collusion in generating these patterns.

Suggested Citation

  • David P. Byrne, 2019. "Gasoline Pricing in the Country and the City," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 55(2), pages 209-235, September.
    • Handle: RePEc:kap:revind:v:55:y:2019:i:2:d:10.1007_s11151-018-9660-x
    DOI: 10.1007/s11151-018-9660-x
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    References listed on IDEAS

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    Cited by:

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    3. Timothy Holt & Mitsuru Igami & Simon Scheidegger, 2021. "Detecting Edgeworth Cycles," Cahiers de Recherches Economiques du Département d'économie 21.16, Université de Lausanne, Faculté des HEC, Département d’économie.
    4. Tsvetanov, Tsvetan & Slaria, Srishti, 2021. "The effect of the Colonial Pipeline shutdown on gasoline prices," Economics Letters, Elsevier, vol. 209(C).

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    More about this item

    Keywords

    Asymmetric pricing; Cost-based pricing; Retail gasoline; Sticky pricing;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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