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An empirical analysis of the spatial variability of fuel prices in the United States

Author

Listed:
  • Antonin Bergeaud

    (Banque de France - Banque de France - Banque de France)

  • Juste Raimbault

    (Center for Advanced Spatial Analysis, UCL - UCL - University College of London [London], ISC-PIF - Institut des Systèmes Complexes - Paris Ile-de-France - ENS Cachan - École normale supérieure - Cachan - UP1 - Université Paris 1 Panthéon-Sorbonne - X - École polytechnique - Institut Curie [Paris] - SU - Sorbonne Université - CNRS - Centre National de la Recherche Scientifique, GC (UMR_8504) - Géographie-cités - UP1 - Université Paris 1 Panthéon-Sorbonne - UPD7 - Université Paris Diderot - Paris 7 - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we use a newly constructed dataset to study the geographic distribution of fuel price across the US at a very high resolution. We study the influence of socio-economic variables through different and complementary statistical methods. We highlight an optimal spatial range roughly corresponding to stationarity scale, and significant influence of variables such as median income, wage with a non-simple spatial behavior that confirms the importance of geographical particularities. On the other hand, multi-level modeling reveals a strong influence of the state in the level of price but also of some local characteristics including population density. Through the combination of such methods, we unveil the superposition of a governance process with a local socio-economical spatial process. The influence of population density on prices is furthermore consistent with a minimal theoretical model of competition between gas stations, that we introduce and solve numerically. We discuss developments and applications, including the elaboration of locally parametrized car-regulation policies.

Suggested Citation

  • Antonin Bergeaud & Juste Raimbault, 2020. "An empirical analysis of the spatial variability of fuel prices in the United States," Post-Print hal-02370106, HAL.
    • Handle: RePEc:hal:journl:hal-02370106
    DOI: 10.1016/j.tra.2019.10.016
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    References listed on IDEAS

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