Federal Reserve Bank Details Findings in Environmental and Resource Economics (The Effects of Competition In the Retail Gasoline Industry): Economics – Environmental and Resource Economics

2026 SEP 08 (NewsRx) -- By a News Reporter-Staff News Editor at Ecology Daily News -- New research on Economics - Environmental and Resource Economics is the subject of a report. According to news originating from Dallas, Texas, by NewsRx correspondents, research stated, “We estimate the effect of competition on incumbent firm pricing by using high-frequency price data and the precise geographic location for all gas stations in California. Using an event-study design, we find that the entry of a new station is associated with an immediate, persistent 2.7-cent decrease in prices at incumbent stores, which equates to a 7% reduction in estimated retail markups.”

Our news journalists obtained a quote from the research from Federal Reserve Bank, “In contrast, nearby exit results in precisely estimated null effects on prices. We do not find that observable differences in station characteristics explain the asymmetry. Rather, we find that selective exit from more competitive markets and less heavily trafficked stations explains the null results for exit.”

According to the news editors, the research concluded: “We discuss the relevance of our estimates to current environmental policy related to the decarbonization of light-duty transportation and zoning and environmental restrictions on gasoline stations.”

This research has been peer-reviewed.

For more information on this research see: The Effects of Competition In the Retail Gasoline Industry. Journal of the Association of Environmental and Resource Economists, 2026;13(5):1311-1336. Journal of the Association of Environmental and Resource Economists can be contacted at: Univ Chicago Press, 1427 E 60TH St, Chicago, IL 60637-2954, USA.

The news correspondents report that additional information may be obtained from Reid Taylor, Federal Reserve Bank, Dept. of Research, 2200 N Pearl St, Dallas, TX 75201, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1086/741830. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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