This paper studies the daily price fixing behaviour of the Spanish fuel stations. Using a difference-in-differences approach, we show that low-cost and independent operators take advantage of needier consumers. Their prices increase on the day the unemployed workers receive their subsidy from the government, whereas, on the same day, branded companies decrease their prices. Retailers, aware of this, raise the price when they know demand increases. This phenomenon emphasises the effect of pay cycles on consumer choices and their related economic impact. Findings are also relevant for Antitrust authorities which generally focus on the activities of major brands’ stations.
Pay cycles and fuel price: a quasi experimental approach
BERGANTINO, A. S.
;INTINI,MARIO;
2020-01-01
Abstract
This paper studies the daily price fixing behaviour of the Spanish fuel stations. Using a difference-in-differences approach, we show that low-cost and independent operators take advantage of needier consumers. Their prices increase on the day the unemployed workers receive their subsidy from the government, whereas, on the same day, branded companies decrease their prices. Retailers, aware of this, raise the price when they know demand increases. This phenomenon emphasises the effect of pay cycles on consumer choices and their related economic impact. Findings are also relevant for Antitrust authorities which generally focus on the activities of major brands’ stations.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.