Is the Retail Gasoline Market Local or National?

Kvasnička, Michal; Staněk, Rostislav; Krčál, Ondřej

doi:10.1007/s10842-017-0249-0

Cited by 10 publications

(8 citation statements)

References 16 publications

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“…Relatedly, in contrast to the retail aggregation principle (Fotheringham 1988;Jensen, Boisson and Larralde 2005), which emphasizes the tendency of similar retail outlets to form clusters, we find that convenience-based outlets such as fuel stations do not benefit from being in a cluster with similar outlets. In fact, similar to Kvasnička et al (2018) and Netz and Taylor (2002), we find that there is a substantial negative impact of local competition from outlets in the same category. This means there is a strong incentive for spatial differentiation.…”

Section: Summary Of Findingssupporting

confidence: 72%

“…Therefore, for them, the attractiveness of an alternative is more affected by its accessibility to other activity locations. It also means that the local competition from nearby alternatives, suggested in the literature (Chandra and Tappata 2011;Cooper and Jones 2007;Kvasnička, Staněk and Krčál 2018;Nishida and Remer 2018), only affects consumers who engage in this strategy, not those who adopted the immediacy-oriented strategy.…”

Section: Summary Of Findingsmentioning

confidence: 99%

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Where to refuel: Modeling on-the-way choice of convenience outlet

Pramono

Oppewal

2021

Journal of Retailing and Consumer Services

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For many goods consumers do not make a special trip to a store. Especially for a convenience good such as fuel they will buy the product while on-the-way to some final destination. This paper introduces on-the-way choice of retail outlet as a form of convenience shopping. It presents a model of on-the-way choice of retail outlet and applies the model in the context of fuel retailing to explore its implications for segmentation and spatial competition. The model allows analyzing how choice of retail outlet varies not only with spatio-temporal variables (distance, detour, local competition and agglomeration) but also with trip-related characteristics such as time of day and prior awareness of one's purchase need. The model is a latent class random utility choice model. An application to gas station choices observed in a medium-sized Asian city show the model to fit substantially better than existing models. The empirical results indicate consumers may adopt one of two decision strategies. When adopting an immediacy-oriented strategy they behave in accordance with the traditional gravity-based retail models and tend to choose the most spatially convenient outlet. When following a destination-oriented strategy they focus more on maintaining their overall trip efficiency and so will tend to visit outlets located closer to their main destination and are more susceptible to retail agglomeration effects. The paper demonstrates how the model can be used to inform segmentation and local competition analyses that account for variations in these strategies as well as variations in consumer type, origin and time of travel. Simulations of a duopoly setting further demonstrate the implications.

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Section: Summary Of Findingssupporting

confidence: 72%

Section: Summary Of Findingsmentioning

confidence: 99%

Where to refuel: Modeling on-the-way choice of convenience outlet

Pramono

Oppewal

2021

Journal of Retailing and Consumer Services

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“…Recently, however, a more sophisticated approach based on geo-information technologies has been exploited in a limited number of works. Specifically, both driving distances (e.g., Tappata and Yan, 2017;Kvasnička et al, 2018) and driving time (e.g., Perdiguero and Borrell, 2018;Perdiguero and Borrell, 2019) have allowed authors to define local markets in a more realistic way than by using simple Euclidean distances. The paper by Perdiguero and Borrell (2019) can be considered of special importance for our purpose since it seeks to delimit the relevant market for each gas station in Spain.…”

Section: Empirical Literaturementioning

confidence: 99%

High temperature heat pump integration into district heating network

Mateu-Royo

Sawalha

Mota-Babiloni

et al. 2020

Energy Conversion and Management

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Despite the relatively large number of gas stations reached in Spain after decades of sectorial reforms, pre-tax fuel prices in the country remain systematically among the highest in the EU. The literature provides evidence suggesting that a low intensity of competition in the retail distribution could contribute to these casual observations. With the purpose of shedding light on ways to design e↵ective competition measures, we conduct an empirical analysis of more than ten million observations containing information about prices, brands, and locations at the station level. This allows us to know whether the exit (entry) of some classes of stations have the ability to reduce the prices of nearby competitors. Our results suggest that the presence in a local market of a station belonging to the network of the dominant market companies will tend to generate prices above the average. This is not only because these stations set higher prices but also because their presence will give rise to overpricing by local competitors.The opposite occurs with the self-advertised as "low-cost" stations. Policy measures promoting the gradual exit of stations associated with the dominant companies seem quite reasonable in view of the commitment to the transition toward transport decarbonization.

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“…Ethanol and electricity prices were fixed by providers whereas prices for charcoal, kerosene and LPG varied spatially. This could be attributed to varying density of points of sale, localised demand and accessibility, as has been found for fuel prices elsewhere (Ghazanfari, 2022;Kvasnička et al, 2018); we have also heard unverified anecdotes about vendors in specific localities collaborating to artificially hike prices. It was slightly cheaper to buy kerosene and LPG from unregulated street vendors than petrol stations.…”

Section: Discussionmentioning

confidence: 79%

Controlled cooking tests comparing the financial, energy and time costs of different food and stove combinations in Nairobi, Kenya

Perros,

O'Keefe,

Mwitari

et al. 2023

Preprint

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With a wide range of stoves and appliances available in the ever-evolving Kenyan cooking market, it is important to understand which options are the most cost, time and energy-efficient to use. This information can help households to make more informed decisions about their energy use and policy makers to better understand which solutions to promote. Despite its importance, the existing literature offers scant evidence to guide optimal stove and fuel choices. In this research, we utilised controlled cooking tests (CCTs) to investigate the fuel required to cook six regularly prepared dishes on ten prevalent stove and fuel combinations (including LPG, ethanol, charcoal, kerosene and electric appliances). We also tested the efficiency improvements from pre-soaking beans and using stovetop pressure cookers. We collected primary fuel cost data from across Nairobi in June 2023 and collated historical fuel prices from secondary sources spanning 2019-2023. The prices of LPG, charcoal and kerosene varied considerably by variables such as brand and location, whereas ethanol and on-grid electricity were more stable. The electric pressure cooker (EPC) was the most cost and energy-efficient device. For LPG and charcoal, combining pre-soaking beans with a pressure cooker substantially reduced fuel consumption, but was still costlier than the EPC. The longitudinal comparison highlighted the dynamic nature of fuel prices in Kenya and how a household’s cost-optimal cooking stack can change at short notice. These findings demonstrate how comparative affordability varies both temporally and spatially and can be heavily affected by wider market and policy incentives.

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Is the Retail Gasoline Market Local or National?

Cited by 10 publications

References 16 publications

Where to refuel: Modeling on-the-way choice of convenience outlet

Where to refuel: Modeling on-the-way choice of convenience outlet

High temperature heat pump integration into district heating network

Controlled cooking tests comparing the financial, energy and time costs of different food and stove combinations in Nairobi, Kenya

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