Geographical Dispersion of Consumer Search Behavior

Hakan Yilmazkuday
2016 Social Science Research Network  
This paper investigates whether consumer search behavior di¤ers across zip codes within the U.S.. As an application, daily gasoline price data covering virtually all gas stations within the U.S. are employed to estimate the distribution of search costs in each zip code. The results show that there are signi...cant di¤erences across zip codes regarding the expected number of searches achieved before consumers purchase gasoline. In order to have a systematic explanation, such di¤erences are
more » ... i¤erences are further connected to geographic, demographic and economic conditions of the zip codes in a secondary analysis. The corresponding results imply several strategies for gas stations in order to maximize pro...ts/markups; suggestions follow for policy makers and regulators to reduce redistributive e¤ects of information barriers across locations. JEL Classi...cation: D12, D83, L81
doi:10.2139/ssrn.2791607 fatcat:wyj4txhpjveideo6zhjhzduqxm