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

Author

Listed:
  • 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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    File URL: http://ageconsearch.umn.edu/record/25049/files/wp020951.pdf
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    References listed on IDEAS

    as
    1. Asher Blass & Dennis W. Carlton, 1999. "The Choice of Organizational Form in Gasoline Retailing and The Costs of Laws Limiting that Choice," NBER Working Papers 7435, National Bureau of Economic Research, Inc.
    2. Scheffman, David T & Spiller, Pablo T, 1987. "Geographic Market Definition under the U.S. Department of Justice Merger Guidelines," Journal of Law and Economics, University of Chicago Press, vol. 30(1), pages 123-147, April.
    3. Severin Boreinstein & Andrea Shepard, 1996. "Dynamic Pricing in Retail Gasoline Markets," RAND Journal of Economics, The RAND Corporation, vol. 27(3), pages 429-451, Autumn.
    4. Marvel, Howard P, 1976. "The Economics of Information and Retail Gasoline Price Behavior: An Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 84(5), pages 1033-1060, October.
    5. 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.
    6. Gilbert, Richard & Hastings, Justine, 2001. "Vertical Integration in Gasoline Supply: An Empirical Test of Raising Rivals' Costs," Department of Economics, Working Paper Series qt6nf907n4, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    7. Marvel, Howard P, 1978. "Competition and Price Levels in the Retail Gasoline Market," The Review of Economics and Statistics, MIT Press, vol. 60(2), pages 252-258, May.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Demand and Price Analysis; Environmental Economics and Policy; Industrial Organization;

    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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