Retail gasoline price dynamics and local market power

Research output: Contribution to journalArticlepeer-review


Using monthly data from the 48 contiguous states (except Nevada) for the 1988-2002 period, it is shown that retail gasoline prices respond faster to wholesale price increases than to equivalent wholesale price decreases. Moreover, markets with high average retail-wholesale margins experience a slower adjustment and a more asymmetric response. Since gasoline is the only variable input, average margins in a state likely reflect the degree of retail market power. This suggests that sticky prices and response asymmetries in the gasoline market are, at least partially, a consequence of retail market power.

Original languageEnglish (US)
Pages (from-to)613-628
Number of pages16
JournalJournal of Industrial Economics
Issue number3
StatePublished - Sep 2008

ASJC Scopus subject areas

  • Accounting
  • General Business, Management and Accounting
  • Economics and Econometrics


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