RESEARCH

Working Papers

Short-Term Impact of Wildfire on Retail Gasoline Prices (Job Market Paper)

with Dusan Paredes, Mark Skidmore, Scott Loveridge

As wildfire becomes increasingly frequent and intense due to multiple factors such as a changing climate and the accumulation of dry vegetation, understanding their economic effects on critical commodities is essential to evaluate their economic consequences beyond immediate property damage. This study assesses the short-term impact of the 2024 Park Fire on local retail gasoline prices in Northern California, using high-frequency station-level data. A generalized difference-in-differences approach and event study reveal that stations within 20 miles of the wildfire experienced a roughly 9-cent-per-gallon price drop compared to more distant controls—an outcome contrasting with the price spikes typically observed after hurricanes and floods. This study contributes to the literature by demonstrating how natural disasters, particularly wildfires, can influence fuel markets in unexpected ways, highlighting the importance of monitoring post-disaster price changes.

Paper

Code

Beyond the Average: Spatial Heterogeneity in Rural-Urban Gasoline Price Gaps in the U.S.

Dusan Paredes, Ye-Rim Lee, Mark Skidmore, Scott Loveridge

Despite the integration of national oil markets, gasoline prices in the United States display marked spatial variation. Using weekly data from over 89,000 stations between 2022 and 2023, this paper applies a multilevel framework to decompose rural–urban price disparities across stations, counties, and states. Nearly 70 percent of total price variation is explained by geography, with state-level factors alone accounting for more than half. Contrary to the idea of a universal rural premium, the national rural–urban gap is close to zero once spatial scale is properly modeled. However, results reveal strong heterogeneity across states: in 17 states urban stations charge more, while in 32 states rural stations pay higher prices. These findings highlight the importance of accounting for geographic scale and institutional boundaries when evaluating the welfare implications of energy prices.