Gasoline Pricing in the Country and the City
David P Byrne
Review of Industrial Organization | Springer (part of Springer Nature) | Published : 2019
In many markets, prices adjust quickly when costs rise, yet adjust sluggishly when costs fall. Such asymmetric pricing has received particular attention in retail gasoline where larger asymmetry has been related to greater market power. Using novel data from urban and rural gasoline markets, I document new evidence on this relationship by providing the first estimates of asymmetric pricing from rural towns. I find substantial asymmetry in these markets, show that local market concentration is positively related to asymmetry, and highlight the potential role of role collusion in generating these patterns.
Funding from the University of Melbourne FBE Faculty Research Grant scheme is acknowledged. The views and opinions expressed in this article are solely those of the author. All links referenced in footnotes were current as of 25/8/2018. The paper's online appendix can be found at: https ://sites. google. com/view/dprby rne/research/