EMPIRICAL STUDIES OF GASOLINE RETAILING: A GUIDE TO THE LITERATURE

TLDR

The paper reviews the rapidly expanding empirical literature on gasoline retailing over the past three decades, driven by antitrust concerns, regulatory changes, and richer pricing data, and examines both price and non‑price decision variables. The authors propose future research directions, notably developing theory and estimating demand with high‑frequency station‑level data. They find that crude‑oil prices chiefly drive national price movements, while market structure influences price dynamics, equilibrium selection, and station‑level differentials, underscoring station heterogeneity and retailer coordination challenges.

Abstract

Abstract This paper surveys the empirical literature on gasoline retailing, which has been growing rapidly over the last three decades, possibly in response to antitrust and regulatory concerns and increased availability of pricing data. Studies of both pricing and non‐price decision variables are considered. In general, it is found that crude oil prices are the primary driver of national price movements over time. However, market structure has been identified as playing a role in price dynamics, equilibrium selection and price differentials across markets and stations. The economic literature emphasizes the importance of heterogeneity across stations and coordination problems faced by retailers. Several directions for future work are suggested, including the development of theory and demand estimation using high‐frequency station level data.