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Understanding Gasoline Price Dispersion


  • Demet Yilmazkuday

    () (Department of Economics, Florida International University)

  • Hakan Yilmazkuday

    () (Department of Economics, Florida International University)


This paper models and estimates the gasoline price dispersion across time and space by using a unique data set at the gas-station level within the U.S.. Nationwide effects (measured by time fixed effects or crude oil prices) explain up to about 51% of the gasoline price dispersion across stations. Refinery-specific costs, which have been ignored in the literature due to using local data sets within the U.S., contribute up to another 33% to the price dispersion. While state taxes explain about 12% of the price dispersion, spatial factors such as local agglomeration externalities, land prices, distribution costs of gasoline explain up to about 4%. The contribution of brand-specific factors is relatively minor.

Suggested Citation

  • Demet Yilmazkuday & Hakan Yilmazkuday, 2016. "Understanding Gasoline Price Dispersion," Working Papers 1602, Florida International University, Department of Economics.
  • Handle: RePEc:fiu:wpaper:1602

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    References listed on IDEAS

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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Understanding Gasoline Price Dispersion
      by Hakan Yilmazkuday in Hakan Yilmazkuday's Blog on 2016-06-13 20:05:00

    More about this item


    Gasoline Prices; Gas-Station Level Analysis; Nighttime Lights; Land Prices; the United States;

    JEL classification:

    • 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
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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