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Customer-employee substitution: Evidence from gasoline stations

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Listed:
  • Emek Basker
  • Lucia Foster
  • Shawn Klimek

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.
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Suggested Citation

  • Emek Basker & Lucia Foster & Shawn Klimek, 2017. "Customer-employee substitution: Evidence from gasoline stations," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 876-896, December.
  • Handle: RePEc:bla:jemstr:v:26:y:2017:i:4:p:876-896
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    File URL: http://hdl.handle.net/10.1111/jems.2017.26.issue-4
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    References listed on IDEAS

    as
    1. Justine S. Hastings, 2004. "Vertical Relationships and Competition in Retail Gasoline Markets: Empirical Evidence from Contract Changes in Southern California," American Economic Review, American Economic Association, vol. 94(1), pages 317-328, March.
    2. Maris Goldmanis & Ali Hortaçsu & Chad Syverson & Önsel Emre, 2010. "E-Commerce and the Market Structure of Retail Industries," Economic Journal, Royal Economic Society, vol. 120(545), pages 651-682, June.
    3. Emek Basker, 2007. "When Good Instruments Go Bad," Working Papers 0706, Department of Economics, University of Missouri.
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    7. Shepard, Andrea, 1991. "Price Discrimination and Retail Configuration," Journal of Political Economy, University of Chicago Press, vol. 99(1), pages 30-53, February.
    8. Daniel Aaronson & Eric French & Isaac Sorkin, 2013. "Firm Dynamics and the Minimum Wage: A Putty-Clay Approach," Working Paper Series WP-2013-26, Federal Reserve Bank of Chicago.
    9. Lucia Foster & John Haltiwanger & Chad Syverson, 2008. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," American Economic Review, American Economic Association, vol. 98(1), pages 394-425, March.
    10. Severin Borenstein, 1991. "Selling Costs and Switching Costs: Explaining Retail Gasoline Margins," RAND Journal of Economics, The RAND Corporation, vol. 22(3), pages 354-369, Autumn.
    11. Ronald N. Johnson & Charles J. Romeo, 2000. "The Impact Of Self-Service Bans In The Retail Gasoline Market," The Review of Economics and Statistics, MIT Press, vol. 82(4), pages 625-633, November.
    12. Blass, Asher A & Carlton, Dennis W, 2001. "The Choice of Organizational Form in Gasoline Retailing and the Cost of Laws That Limit That Choice," Journal of Law and Economics, University of Chicago Press, vol. 44(2), pages 511-524, October.
    13. Assar Lindbeck & Solveig Wikström, 2003. "E‐exchange and the Boundary between Households and Organizations," Kyklos, Wiley Blackwell, vol. 56(3), pages 315-340, August.
    14. Roger R. Betancourt, 2004. "The Economics of Retailing and Distribution," Books, Edward Elgar Publishing, number 3511.
    15. Ron S Jarmin & Javier Miranda, 2002. "The Longitudinal Business Database," Working Papers 02-17, Center for Economic Studies, U.S. Census Bureau.
    16. Lucia Foster & Cheryl Grim & John Haltiwanger & Zoltan Wolf, 2016. "Firm-Level Dispersion in Productivity: Is the Devil in the Details?," American Economic Review, American Economic Association, vol. 106(5), pages 95-98, May.
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    Citations

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    Cited by:

    1. Lordan, Grace & Neumark, David, 2018. "People versus machines: The impact of minimum wages on automatable jobs," Labour Economics, Elsevier, vol. 52(C), pages 40-53.
    2. Susan N. Houseman & Brad J. Hershbein, 2018. "Understanding the Decline of U.S. Manufacturing Employment," Upjohn Working Papers and Journal Articles 18-287, W.E. Upjohn Institute for Employment Research.
    3. Lucas W. Davis, Shaun Mcrae, and Enrique Seira Bejarano, 2019. "An Economic Perspective on Mexico's Nascent Deregulation of Retail Petroleum Markets," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    4. Taehwan Kim, 2018. "Price Competition and Market Segmentation in Retail Gasoline: New Evidence from South Korea," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 53(3), pages 507-534, November.
    5. Daniel Aaronson & Brian J Phelan, 2019. "Wage Shocks and the Technological Substitution of Low‐wage Jobs," Economic Journal, Royal Economic Society, vol. 129(617), pages 1-34.
    6. Emin Dinlersoz & Zoltan Wolf, 2018. "Automation, Labor Share, and Productivity: Plant-Level Evidence from U.S. Manufacturing," Working Papers 18-39, Center for Economic Studies, U.S. Census Bureau.
    7. Berger, Thor & Chen, Chinchih & Frey, Carl Benedikt, 2018. "Drivers of disruption? Estimating the Uber effect," European Economic Review, Elsevier, vol. 110(C), pages 197-210.
    8. Soetevent, Adriaan R. & Bružikas, Tadas, 2018. "The impact of process innovation on prices: Evidence from automated fuel retailing in The Netherlands," European Economic Review, Elsevier, vol. 110(C), pages 181-196.
    9. Emek Basker & Randy A. Becker & Lucia Foster & T. Kirk White & Alice Zawacki, 2019. "Addressing Data Gaps: Four New Lines of Inquiry in the 2017 Economic Census," Working Papers 19-28, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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