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


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.


Accessibility Location Petrol stations Oligopoly 

JEL Classification

R40 L13 L81 



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


  1. Atkinson B, Eckert A, West DS (2009) Price matching and the domino effect in a retail gasoline market. Econ Inq 47(3):568–588CrossRefGoogle Scholar
  2. Baradaran S, Ramjerdi F (2001) Performance of accessibility measures in Europe. J Transp Stat 4(2/3):31–48Google Scholar
  3. Barron JM, Taylor BA, Umbeck JR (2004) Number of sellers, average prices, and price dispersion. Int J Ind Organ 22:1041–1066CrossRefGoogle Scholar
  4. Berry S (1994) Estimating discrete-choice models of product differentiation. Rand J Econ 25(2):242–262CrossRefGoogle Scholar
  5. Berry S, Levinshon J, Pakes A (1995) Automobile prices in market equilibrium. Econometrica 63(4):841–890CrossRefGoogle Scholar
  6. Borenstein S (1991) Selling costs and switching costs: explaining retail gasoline margins. Rand J Econ 22(3):354–369CrossRefGoogle Scholar
  7. Borrell JR, Perdiguero J (2007) La Competència en la distribució de gasolina a Catalunya. Tribunal Català de Defensa de la Competència (TCDC), BarcelonaGoogle Scholar
  8. Bromiley P, Papenhausen C, Borchert P (2002) Why do gas prices vary, or towards understanding the micro-structure of competition. Manage Decis Econ 23:171–186CrossRefGoogle Scholar
  9. Caixa L (2007) Anuario Económico de España 2007. Servicio de Estudios de La Caixa, BarcelonaGoogle Scholar
  10. Campos J, de Rus G (2002) Dotación de infraestructuras y política europea de transporte. Papeles de Economía Española 91:169–181Google Scholar
  11. Comisión Nacional de Competencia (2009) Informe sobre la competencia en el sector de carburantes de automoción. Comisión Nacional de Competencia, MadridGoogle Scholar
  12. El-Geneidy AM, Levinson DM (2006) Access to destinations: development of accessibility measures, Report 2006-16, Minnesota Department of TransportationGoogle Scholar
  13. Franklin J, Waddell P (2003) A hedonic regression of home prices in King County, Washington using activity-specific accessibility measures. Paper presented at the Transportation Research Board 82nd Annual Meeting, Washington DCGoogle Scholar
  14. Handy SL (2002) Accessibility—vs mobility—enhancing strategies for addressing automobile dependence in the US. Paper presented at the Transportation Research Board 82nd Annual Meeting, Washington DCGoogle Scholar
  15. Handy SL, Niemeier DA (1997) Measuring accessibility: an exploration of issues and alternatives. Environ Plann A 29(7):1175–1194CrossRefGoogle Scholar
  16. HEATCO, Developing Harmonised European Approaches for Transport Costing and Project Assessment (2006): Deliverable 5: Proposal for Harmonised Guidelines. European CommissionGoogle Scholar
  17. Hotelling H (1929) Stability in competition. Econ J 39:41–57CrossRefGoogle Scholar
  18. Ivaldi M, Verboven F (2005) Quantifying the effects from horizontal mergers in European competition policy. Int J Ind Organ 23(9–10):669–691CrossRefGoogle Scholar
  19. Kaufman PR, MacDonald JM, Lutz SM, Smallwood DM (1997) Do the poor pay more for food? Item selection and price differences affect low-income household food costs. Agric Econ Rep Number 759. Economic Research Service, United States Department of AgricultureGoogle Scholar
  20. MacDonald J, Nelson PE (1991) Do the poor still pay more? Food price variations in large metropolitan areas. J Urban Econ 30:344–359CrossRefGoogle Scholar
  21. Mazzeo MJ (2002) Competitive outcomes in product-differentiated oligopoly. Rev Econ Stat 84:716–728CrossRefGoogle Scholar
  22. Miras P (2007) Los mercados de productos petrolíferos: Una panorámica. Econ Ind 365:69–78Google Scholar
  23. Pakes A, Berry S, Levinshon J (1993) Applications and limitations of some recent advances in empirical industrial organization: price indexes and the analysis of environmental change. Am Econ Rev 83(2):241–246Google Scholar
  24. Perdiguero J, Borrell JR (2007) La difícil conducción de la competencia por el sector de las gasolinas en España. Econ Ind 365:113–125Google Scholar
  25. Perdiguero J, Jiménez JL (2009) ¿Competencia o colusión en el mercado de gasolina?: una aproximación a través del parámetro de conducta. Rev de Econ Apl XVII(50):27–45Google Scholar
  26. Pinske J, Slade ME, Brett C (2002) Spatial price competition: a semiparametric approach. Econometrica 70(3):1111–1153CrossRefGoogle Scholar
  27. Ritsema van Eck JR, de Jong T (1999) Accessibility analysis and spatial competition effects in the context of GIS-supported service location planning. Comput Environ Urban Syst 23:75–89CrossRefGoogle Scholar
  28. Salop S (1979) Monopolistic competition with outside goods. Bell J Econ 10:141–156CrossRefGoogle Scholar
  29. Spiller PT, Huang CF (1986) On the extent of the market: wholesale gasoline in the northeastern United States. J Ind Econ XXXV:131–145CrossRefGoogle Scholar
  30. Srour I, Kockelman K, Dunn T (2002) Accessibility indices: connection to residential land prices and location choices. Transp Res Rec 1805:25–34CrossRefGoogle Scholar
  31. Staiger D, Stock JH (1997) Instrumental variables regression with weak instruments. Econometrica 65(3):557–586CrossRefGoogle Scholar
  32. Stewart H, Davis D (2005) Price dispersion and accessibility: a case study of fast food. South Econ J 4(71):784–799CrossRefGoogle Scholar
  33. Stigler G (1961) The economics of information. J Polit Econ 69:213–225CrossRefGoogle Scholar
  34. van Wee B, Hagoort M, Annema JA (2001) Accessibility measures with competition. J Transp Geogr 9:199–208CrossRefGoogle Scholar
  35. Vickerman RW (1974) Accessibility, attraction and potential: a review of some concepts and their use in determining mobility. Environ Plann A 6:675–691CrossRefGoogle Scholar
  36. Wachs M, Kumagai T (1973) Physical accessibility as a social indicator. Socio-econ Plann Sci 7:327–456CrossRefGoogle Scholar

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

Personalised recommendations