Understanding Gasoline Price Dispersion

Hakan Yilmazkuday, Demet Ulker
2012 Social Science Research Network  
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 e¤ects (measured by time ...xed e¤ects or crude oil prices) explain up to about 51% of the gasoline price dispersion across stations. Re...nery-speci...c 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
more » ... 2% 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-speci...c factors is relatively minor. JEL Classi...cation: L11, L81, R32, R41,
doi:10.2139/ssrn.2034478 fatcat:z55xy3s5rzh4lkd5vwmaumabiu