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Gasoline Price Dispersion and Consumer Search: Evidence from a Natural Experiment

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  • Michael D. Noel

Abstract

The vast majority of empirical studies examining the link between consumer search and price dispersion focus on how changes in consumer search impact price dispersion. This article does the reverse—it examines how a shock to price dispersion impacts consumer search. A direct measure of search is used and an exogenous shock to price dispersion is found in a refinery fire that caused decades‐old retail gasoline price cycles, and the nonlinear high‐frequency price dispersion pattern generated by them, to stop. Identifying effects from this shock, the results show a substantial response of consumer search to changes in price dispersion.

Suggested Citation

  • Michael D. Noel, 2018. "Gasoline Price Dispersion and Consumer Search: Evidence from a Natural Experiment," Journal of Industrial Economics, Wiley Blackwell, vol. 66(3), pages 701-738, September.
    • Handle: RePEc:bla:jindec:v:66:y:2018:i:3:p:701-738
    DOI: 10.1111/joie.12179
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    Cited by:

    1. Jeisson Cárdenas & Jesús Otero & Luis H. Gutiérrez, 2022. "Search intensity, search time and prices: evidence from retail diesel markets in France," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(6), pages 4797-4807, December.
    2. Xu, Jiayi & Zhang, Xiao-Bing & Liu, Yang, 2024. "Asymmetric search behavior for gasoline prices: Evidence from the Chinese gasoline market," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 699-712.
    3. Chen, Jihui, 2024. "Does COVID-19 decrease price dispersion? Recent evidence from the airline industry," Research in Economics, Elsevier, vol. 78(2).
    4. Olatunji Abdul Shobande & Mobolaji Daniel Akinbomi, 2020. "Competition dynamics in Nigerian aviation industry: a game theoretic approach," Future Business Journal, Springer, vol. 6(1), pages 1-8, December.
    5. Bergantino, Angela Stefania & Intini, Mario & Perdiguero, Jordi, 2020. "Pay cycles and fuel price: a quasi experimental approach," The Warwick Economics Research Paper Series (TWERPS) 1288, University of Warwick, Department of Economics.
    6. Christos Genakos & Blair Yuan Lyu & Mario Pagliero, 2024. "Asymmetric pass-through and competition," CEP Discussion Papers dp2028, Centre for Economic Performance, LSE.

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