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Price dispersion and station heterogeneity on German retail gasoline markets

Listed author(s):
  • Haucap, Justus
  • Heimeshoff, Ulrich
  • Siekmann, Manuel

Price levels and movements on gasoline and diesel markets are heavily debated among consumers, policy-makers, and competition authorities alike. In this paper, we empirically investigate how and why price levels differ across gasoline stations in Germany, using eight months of data from a novel panel data set including price quotes from virtually all German stations. Our analysis specifically explores the role of station heterogeneity in explaining price differences across gasoline stations. Key determinants of price levels across fuel types are found to be ex-refinery prices as key input costs, a station's location on roads or highway service areas, and brand recognition. A lower number of station-specific services implies lower fuel price levels, so does a more heterogeneous local competitive environment.

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File URL: https://www.econstor.eu/bitstream/10419/106709/1/81701960X.pdf
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Paper provided by University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 171.

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Date of creation: 2015
Handle: RePEc:zbw:dicedp:171
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