1
$\begingroup$

I am looking for studies in which the effect on demand of different prices of gasoline at different gas stations in the same area is measured or estimated (on the same day or hour).

This question has to do with price elasticity. Since gasoline is strongly needed on a daily basis in equal amounts by many people, its price elasticity is quite low and estimated to be in the range of -0.02 to -0.04 in the short term.

But I want to look a bit deeper: Can (and were) the effect on demand of different prices of gasoline at different gas stations in the same area be measured?

$\endgroup$
  • $\begingroup$ Not sure about sales data... Just wanna add that one thing I thought of doing a while ago is looking at gas stations at the state border (say CA and NV). That should give you more price difference. $\endgroup$ – Art Nov 10 at 2:23
  • $\begingroup$ @Art: I'm not looking for the price differences itself but on their effect on demand (i.e. sold quantities). $\endgroup$ – Hans-Peter Stricker Nov 10 at 6:39
  • $\begingroup$ I guess what I was trying to say is that the greater price difference would give you potentially greater quantity sold difference. As you said, gas demand is pretty inelastic, so a difference of 1 or 2 cents might not give you any difference in quantity demanded. $\endgroup$ – Art Nov 10 at 7:03
  • $\begingroup$ @Art: Ah, very good point! $\endgroup$ – Hans-Peter Stricker Nov 10 at 7:14
  • $\begingroup$ @Art: Are price differences considerably greater between states (not so in Germany, I guess)? $\endgroup$ – Hans-Peter Stricker Nov 10 at 10:59

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.