Will Open Supply Lower Retail Gasoline Prices? |
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| Authors: | John M. Barron Beck A. Taylor John R. Umbeck |
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| Affiliation: | Barron:;Professor, Department of Economics, Purdue University, W. Lafayette, IN 47907-1310. Phone 1-765-494-4451;Fax 1-765-494-9658;E-mail Taylor:;W. H. Smith Professor of Economics, Department of Economics, Baylor University, Waco, TX 76798-8003. Phone 1-254-710-4549;Fax 1-254-710-6142;E-mail Umbeck:;Professor, Department of Economics, Purdue University, W. Lafayette, IN 47907-1310. Phone 1-765-494-4447;Fax 1-765-494-9658;E-mail |
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| Abstract: | Retail gasoline lessee-dealers have lobbied for the right to purchase their gasoline supplies from sources other than the lessor-refiners with whom they have contracted. This article examines a unique data set of gasoline prices in Los Angeles, along with corresponding market- and station-level characteristics, to gain some insights into whether the proposed "open-supply" legislation would likely lower the prices charged to consumers. Controlling for market- and station-level characteristics, the authors find that stations with the most alternative sources of gasoline supplies have significantly higher retail prices, casting serious doubt on the claims made by open-supply proponents. (JEL L0 , L1 , L4 ) |
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