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Gasoline Price Differences: Taxes, Pollution Regulations, Mergers, Market Power, and Market Conditions

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  • Chouinard, Hayley H.
  • Perloff, Jeffrey M.

Abstract

Retail and wholesale gasoline prices vary over time and across geographic locations due to differences in government policies and other factors that affect demand, costs, and market power. We use a two-equation, reduced-form model to determine the relative importance of these various factors. An increase in the price of crude oil has been virtually the only major factor contributing to a general rise in prices over the last couple of decades. Tax variations and mergers contribute substantially more to geographic price differentials than do price discrimination, cost factors, or pollution controls.

Suggested Citation

  • Chouinard, Hayley H. & Perloff, Jeffrey M., 2002. "Gasoline Price Differences: Taxes, Pollution Regulations, Mergers, Market Power, and Market Conditions," CUDARE Working Papers 25049, University of California, Berkeley, Department of Agricultural and Resource Economics.
    • Handle: RePEc:ags:ucbecw:25049
    DOI: 10.22004/ag.econ.25049
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    More about this item

    Keywords

    Demand and Price Analysis; Environmental Economics and Policy; Industrial Organization;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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