Abstract: This paper characterizes fueling stations' pricing strategies to study price variation within retail gasoline markets. We use a unique dataset with stations' locations and daily gasoline prices in the major cities of the continental U.S. to classify cycler and non-cycler stations. We exploit station-level variability in pricing behavior within retail gasoline markets to show that cyclers charge about 4 cents lower gasoline prices than non-cyclers, on average. Additionally, we confirm an almost biweekly duration of the station-level cycling behavior that precludes the standard explanation of this price dynamics using the Edgeworth cycle model. Finally, we provide evidence of consumer search to explain the intra-market pricing strategy heterogeneity.
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Abstract: The effects of taxes on business location decisions and local competition are core issues in public finance. A notable feature in previous literature is the lack of consensus as to whether taxes deter business entrance. The retail gasoline industry faces significant fuel tax differences across state borders that make it possible to revisit this classical debate. In this paper, I employ a unique dataset on fueling station locations in the United States and their corresponding retail gasoline prices to estimate how state tax discontinuities affect business location decisions and tax incidence. The analysis, which takes advantage of significant differences in state gasoline tax rates, shows that a higher number of stations operate on the low-tax side, and that these stations pass along a greater portion of the tax burden to their customers than do their counterparts on the high-tax side of the border. The expected number of fueling stations on the low-tax side of a state border is 30 percent higher than on the high-tax side. Gasoline consumers bear 75 percent of the fuel tax on the high-tax side, as compared to 100 percent on the low-tax side. The effect of the border on station location and tax incidence disappears with 15 miles of distance. These results provide some of the first estimates of the effect of tax discontinuities at borders on the location choices of retailers, their competitors, and its consequences for the pass-through of taxes to prices.
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Abstract: We use a unique administrative dataset on housing transactions in Tehran to provide evidence on the incidence and distortionary effects of taxes on rental properties. We exploit a particular feature of the tax code in the Tehran rental market, where the tax-exemption threshold depends on the property’s size. Substantial bunching occurs below the tax cutoff, suggesting strong behavioral responses to the tax kink. We also find higher after-tax rents above the kink. Based on these variations, we develop a structural framework with property taxes and filing costs to estimate the price elasticities of housing size supply and demand. We estimate a mid-run (10-year) price elasticity of housing size supply of 1.36 and price elasticity of housing size demand of -0.17. We find high, but incomplete pass-through of the rental tax, implying that renters bear most filing costs.
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Abstract: This paper introduces a new econometric method to identify factors influencing the disparities within the distribution of a positive random variable, focusing on US wages between 1986 and 2015. I relate the conditional Lorenz curve to the conditional quantile function to additively decompose the conditional Gini index. Moreover, this paper presents a technique to disentangle the temporal changes in the distribution. The analysis shows that despite reduced impacts of race and gender on wages, persistent disparities require ongoing intervention, while higher education, especially college degrees, significantly reduces wage inequality during the analysis period.
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