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An empirical analysis of the spatial variability of fuel prices in the United States

  • Bergeaud, Antonin
  • Raimbault, Juste
Published Article
Publication Date
Nov 21, 2019
Submission Date
Jun 22, 2017
DOI: 10.1016/j.tra.2019.10.016
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In this paper, we use a newly constructed dataset to study the geographic distribution of fuel price across the US at a very high resolution. We study the influence of socio-economic variables through different and complementary statistical methods. We highlight an optimal spatial range roughly corresponding to stationarity scale, and significant influence of variables such as median income, wage with a non-simple spatial behavior that confirms the importance of geographical particularities. On the other hand, multi-level modeling reveals a strong influence of the state in the level of price but also of some local characteristics including population density. Through the combination of such methods, we unveil the superposition of a governance process with a local socio-economical spatial process. The influence of population density on prices is furthermore consistent with a minimal theoretical model of competition between gas stations, that we introduce and solve numerically. We discuss developments and applications, including the elaboration of locally parametrized car-regulation policies.

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