IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-00737934.html
   My bibliography  Save this paper

The impact of fuel tourism on retailers' diesel price in Spanish neighbouring regions

Author

Listed:
  • Desiderio Romero-Jordán

    (Economía Aplicada II - URJC - Universidad Rey Juan Carlos [Madrid])

  • Marta Jorge

    (Economía - Universidad de León [León])

  • Santiago Álvarez-García

    (Economía - Universidad de Oviedo [Oviedo])

Abstract

Since 1986, car fuel consumption in Spain is subject to the Special Hydrocarbons Tax and the Value Added Tax. In addition, since 2002 regional governments have been able to apply a regional excise duty on hydrocarbons. This article analyses the impact that such a regional tax has on the retailer's diesel price at the border of the province of Lugo (in the region of Galicia) and the province of Leon (in the region of Castile-Leon) (only the former region has the regional tax). Evidence shows that variations in the price of diesel at the border of Lugo are of the same sign but of lower intensity than at the border of Leon (the price-price elasticity is 0.8060). These results suggest that service stations located in regions with higher excise duties use their price policy to lessen the negative effects generated for fuel tourism.

Suggested Citation

  • Desiderio Romero-Jordán & Marta Jorge & Santiago Álvarez-García, 2011. "The impact of fuel tourism on retailers' diesel price in Spanish neighbouring regions," Post-Print hal-00737934, HAL.
  • Handle: RePEc:hal:journl:hal-00737934
    DOI: 10.1080/00036846.2011.605757
    Note: View the original document on HAL open archive server: https://hal.science/hal-00737934
    as

    Download full text from publisher

    File URL: https://hal.science/hal-00737934/document
    Download Restriction: no

    File URL: https://libkey.io/10.1080/00036846.2011.605757?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Rietveld, Piet & van Woudenberg, Stefan, 2005. "Why fuel prices differ," Energy Economics, Elsevier, vol. 27(1), pages 79-92, January.
    2. FitzGerald, John & Bergin, Adele & Conefrey, Thomas & Diffney, Sean & Duffy, David & Kearney, Ide & Lyons, Sean & Malaguzzi Valeri, Laura & Mayor, Karen & Richard S. J. Tol, 2008. "Medium-Term Review 2008-2015, No. 11," Forecasting Report, Economic and Social Research Institute (ESRI), number MTR11, August.
    3. Lucas, Vander, 2004. "Cross-border shopping in a federal economy," Regional Science and Urban Economics, Elsevier, vol. 34(4), pages 365-385, July.
    4. Asplund, Marcus & Friberg, Richard & Wilander, Fredrik, 2007. "Demand and distance: Evidence on cross-border shopping," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 141-157, February.
    5. Axel Dreher & Tim Krieger, 2010. "Diesel price convergence and mineral oil taxation in Europe," Applied Economics, Taylor & Francis Journals, vol. 42(15), pages 1955-1961.
    6. Rietveld, P. & Bruinsma, F. R. & van Vuuren, D. J., 2001. "Spatial graduation of fuel taxes; consequences for cross-border and domestic fuelling," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(5), pages 433-457, June.
    7. Banfi, Silvia & Filippini, Massimo & Hunt, Lester C., 2005. "Fuel tourism in border regions: The case of Switzerland," Energy Economics, Elsevier, vol. 27(5), pages 689-707, September.
    8. Livio Di Matteo, 1999. "Using alternative methods to estimate the determinants of cross-border trips," Applied Economics, Taylor & Francis Journals, vol. 31(1), pages 77-88.
    9. Egger, Peter & Pfaffermayr, Michael & Winner, Hannes, 2005. "Commodity taxation in a 'linear' world: a spatial panel data approach," Regional Science and Urban Economics, Elsevier, vol. 35(5), pages 527-541, September.
    10. Kanbur, Ravi & Keen, Michael, 1993. "Jeux Sans Frontieres: Tax Competition and Tax Coordination When Countries Differ in Size," American Economic Review, American Economic Association, vol. 83(4), pages 877-892, September.
    11. Jan K. Brueckner, 2003. "Strategic Interaction Among Governments: An Overview of Empirical Studies," International Regional Science Review, , vol. 26(2), pages 175-188, April.
    12. You-Qiang Wang, 1999. "Commodity Taxes under Fiscal Competition: Stackelberg Equilibrium and Optimality," American Economic Review, American Economic Association, vol. 89(4), pages 974-981, September.
    13. James Alm & Edward Sennoga & Mark Skidmore, 2009. "Perfect Competition, Urbanization, And Tax Incidence In The Retail Gasoline Market," Economic Inquiry, Western Economic Association International, vol. 47(1), pages 118-134, January.
    14. Mark D. Manuszak & Charles C. Moul, 2009. "How Far for a Buck? Tax Differences and the Location of Retail Gasoline Activity in Southeast Chicagoland," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 744-765, November.
    15. Leal, Andrés & López-Laborda, Julio & Rodrigo, Fernando, 2009. "Prices, taxes and automotive fuel cross-border shopping," Energy Economics, Elsevier, vol. 31(2), pages 225-234.
    16. Christiansen, Vidar, 1994. " Cross-Border Shopping and the Optimum Commodity Tax in a Competitive and a Monopoly Market," Scandinavian Journal of Economics, Wiley Blackwell, vol. 96(3), pages 329-341.
    17. repec:kap:iaecre:v:16:y:2010:i:2:p:135-148 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:kap:iaecre:v:16:y:2010:i:2:p:135-148 is not listed on IDEAS
    2. Andrés Leal & Julio López-Laborda & Fernando Rodrigo, 2010. "Cross-Border Shopping: A Survey," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 16(2), pages 135-148, May.
    3. Leal, Andrés & López-Laborda, Julio & Rodrigo, Fernando, 2009. "Prices, taxes and automotive fuel cross-border shopping," Energy Economics, Elsevier, vol. 31(2), pages 225-234.
    4. Thomas Y. Mathä & Alessandro Porpiglia & Michael Ziegelmeyer, 2017. "Cross-border commuting and consuming: an empirical investigation," Applied Economics, Taylor & Francis Journals, vol. 49(20), pages 2011-2026, April.
    5. Jansen, David-Jan & Jonker, Nicole, 2018. "Fuel tourism in Dutch border regions: Are only salient price differentials relevant?," Energy Economics, Elsevier, vol. 74(C), pages 143-153.
    6. Ramsey Doug & Thimm Tatanja & Hehn Leonie, 2019. "Cross-border Shopping Tourism: A Switzerland-Germany Case Study," European Journal of Tourism, Hospitality and Recreation, Sciendo, vol. 9(1), pages 3-17, May.
    7. repec:mea:meawpa:14284 is not listed on IDEAS
    8. Jansen, David-Jan & Jonker, Nicole, 2018. "Fuel tourism in Dutch border regions: Are only salient price differentials relevant?," Energy Economics, Elsevier, vol. 74(C), pages 143-153.
    9. Fullerton, Thomas M. & Jiménez, Alan A. & Walke, Adam G., 2015. "An econometric analysis of retail gasoline prices in a border metropolitan economy," The North American Journal of Economics and Finance, Elsevier, vol. 34(C), pages 450-461.
    10. Xin Liu & Paul Madden, 2007. "Bigger Countries with Probably Lower Commodity Taxes," Economics Discussion Paper Series 0711, Economics, The University of Manchester.
    11. Yoshimi Adachi & Hikaru Ogawa, 2022. "Cross-Border Shopping, E-Commerce, and Consumption Tax Revenues in Japan," CIRJE F-Series CIRJE-F-1204, CIRJE, Faculty of Economics, University of Tokyo.
    12. Aiura, Hiroshi & Ogawa, Hikaru, 2013. "Unit tax versus ad valorem tax: A tax competition model with cross-border shopping," Journal of Public Economics, Elsevier, vol. 105(C), pages 30-38.
    13. Odran Bonnet & Étienne Fize & Tristan Loisel & Lionel Wilner, 2024. "Is Carbon Tax Truly More Salient? Evidence from Fuel Tourism at the France-Germany Border," CESifo Working Paper Series 10918, CESifo.
    14. Susan Xu Tang & David L. Sjoquist, 2019. "Differential Effects of Federal and State Gasoline Taxes on Gasoline Consumption," Hacienda Pública Española / Review of Public Economics, IEF, vol. 229(2), pages 11-32, June.
    15. Ghoddusi, Hamed & Rafizadeh, Nima & Rahmati, Mohammad H., 2018. "Price elasticity of gasoline smuggling: A semi-structural estimation approach," Energy Economics, Elsevier, vol. 71(C), pages 171-185.
    16. Saša Ranđelović & Milica Bisić, 2021. "Excise duties harmonisation and smoking in a model with cross-border arbitrage," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(2), pages 507-532, May.
    17. Friberg, Richard & Halseth, Emil M. Strøm & Frode, Steen & Ulsaker, Simen A., 2022. "The effect of cross-border shopping on commodity tax revenue: Results from a natural experiment," Discussion Paper Series in Economics 9/2022, Norwegian School of Economics, Department of Economics.
    18. Asplund, Marcus & Friberg, Richard & Wilander, Fredrik, 2007. "Demand and distance: Evidence on cross-border shopping," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 141-157, February.
    19. Jørgen Aasness & Odd Erik Nygård, 2009. "Revenue functions and Dupuit curves for indirect taxes with cross-border shopping," Discussion Papers 573, Statistics Norway, Research Department.
    20. Agrawal, David R. & Trandel, Gregory A., 2019. "Dynamics of policy adoption with state dependence," Regional Science and Urban Economics, Elsevier, vol. 79(C).
    21. Hebous, Shafik & Keen, Michael, 2023. "Pareto-improving minimum corporate taxation," Journal of Public Economics, Elsevier, vol. 225(C).
    22. Francisco Manuel Pizzi, 2020. "¿Cuán lejos viajarías por nafta más barata? Efectos heterogéneos en ventas de combustibles ante un shock impositivo," Asociación Argentina de Economía Política: Working Papers 4389, Asociación Argentina de Economía Política.

    More about this item

    Keywords

    Social Sciences & Humanities;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-00737934. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.