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Networks and Spatial Economics

, Volume 11, Issue 4, pp 677–699 | Cite as

Does Accessibility Affect Retail Prices and Competition? An Empirical Application

  • Juan Luis JiménezEmail author
  • Jordi Perdiguero
Article

Abstract

This paper attempts to link the concepts of accessibility and the firm’s conduct in the regional retail market in Spain. We use a database that includes sale price, service station location, level of traffic and type of road. We show that accessibility has two main effects on final prices. The accessibility of own-brand gas stations increased their prices while the accessibility of rival gas stations causes price reductions. If we include the value of time, then no rational consumer should travel further than his nearest petrol station in search of lower prices. Finally, our paper shows that service stations can establish a dominant position if consumers do not have access to other retailers within a 17-min radius.

Keywords

Accessibility Location Petrol stations Oligopoly 

JEL Classification

R40 L13 L81 

Notes

Acknowledgements

This paper has benefited from helpful comments and suggestions by Juan Carlos Martín, Javier Campos and two anonymous referees. We are also grateful for the database assistance by Héctor Rodríguez and Adrià Botey. This research has received financial help from the Spanish Ministry of Science and Technology (ECO 2009-06946/ECON). A previous version of this paper has been published as Working Paper no. 456 in the Fundación de las Cajas de Ahorros (FUNCAS) collection. The usual disclaimer applies.

Supplementary material

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Copyright information

© Springer Science+Business Media, LLC 2010

Authors and Affiliations

  1. 1.Grupo de Economía de las Infraestructuras y el Transporte (EIT), Facultad de Economía, Empresa y TurismoUniversidad de Las Palmas de Gran CanariaLas PalmasSpain
  2. 2.Departamento de Política Económica, Grup de Governs i Mercats (GIM), Institut de Recerca en Economía Aplicada (IREA)Universitat de BarcelonaBarcelonaSpain

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