A Cluster Analysis of Petrol Profit Margins across Various Regional and Urban Locations in Australia

Title
A Cluster Analysis of Petrol Profit Margins across Various Regional and Urban Locations in Australia
Publication Date
2014
Author(s)
Valadkhani, Abbas
Chen, George
( author )
OrcID: https://orcid.org/0000-0002-8519-9340
Email: gchen2@une.edu.au
UNE Id une-id:gchen2
Anderson, John
Type of document
Journal Article
Language
en
Entity Type
Publication
Publisher
Australia and New Zealand Regional Science Association International Inc (ANZRSAI)
Place of publication
Australia
UNE publication id
une:15475
Abstract
Rising fuel prices can hamper economic activities in urban and regional areas. Despite following a mean reverting pattern over time, the spread between retail and wholesale prices of petrol exhibits significant differences across various geographical locations in Australia. Using a hierarchical cluster analysis, this paper classifies 109 retail locations into six heterogeneous groups with homogeneous contents. By identifying the whereabouts of those petrol stations that set relatively high gross profit margins within each comparable cluster, this study can provide important policy implications for both consumers and regulators. Contrary to popular belief, we found that excessively high margins are not necessarily observed only in remote and rural areas.
Link
Citation
Australasian Journal of Regional Studies, 20(1), p. 159-184
ISSN
1324-0935
Start page
159
End page
184

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