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Fuel Prices and Station Heterogeneity on Retail Gasoline Markets

Abstract:
We empirically investigate how and why price levels differ across gasoline stations, using the first full year from a novel panel data set including price quotes from virtually all gas stations in Germany. Our analysis specifically explores the role of station heterogeneity in explaining price differences across gasoline stations. Key determinants of price levels 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, as does a more heterogeneous local competitive environment.

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Keywords: Gasoline Pricing, Station Heterogeneity, Fuel Prices, Gasoline Stations

DOI: 10.5547/01956574.38.6.jhau

References: View References


Published in Volume 38, Number 6 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.