earticle

영어

Gasoline prices vary across Korea. Some gas stations charge higher prices, while others charge lower prices. In this paper, we try to find: why gasoline prices differ markedly across regions. We empirically estimate the determinants of gas prices by incorporating supply side factors as well as demand side factors into the empirical model. Empirical results show that both location-specific factors and store-specific factors affect gas prices. Concentration of competing stores, store brands, ownership of gas stations, and self-service availability influence gas prices. In addition, the availability of other customer services such as convenience stores, car wash, and auto repairs affects gas prices.