Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/338915 
Year of Publication: 
2026
Series/Report no.: 
DIW Discussion Papers No. 2154
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
This paper examines the "right" geographic definition of relevant markets by analyzing how excise tax pass-through varies with local competition in the retail gasoline market of a large metropolitan city. Using a natural experiment from three unanticipated and exogenous fuel tax hikes and detailed station-level price data, we show that average pass-through is invariant to the number of nearby competitors across various geographic definitions. This contrasts with theoretical predictions and prior island-based evidence, suggesting that the entire metropolitan area functions as a single market. Our findings challenge standard isodistance- or isochrone- based market delineations used in academic research and competition policy.
Subjects: 
geographic market definition
gasoline market
competition
pass-through
market structure
JEL: 
H22
L1
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.