Self-service bans and gasoline prices: The effect of allowing consumers to pump their own gas

Abstract

Most of the world's population lives in countries that ban the self-service sale of gasoline. Causal effects of this regulation can hardly be assessed in these countries due to a lack of policy changes, but a recent quasi-experiment in the state of Oregon allows us to analyze the impact of the ban. From 1992 to 2017, the state of Oregon was one of two U.S. states that banned self-service at gasoline stations. Oregon adjusted regulations at the start of 2018 to allow self-service at gasoline stations in counties with populations below 40,000 individuals. I examine the repeal of this self-service ban and its effects on gasoline prices. I apply a difference-in-differences design using high frequency data of gasoline prices and find that repealing the self-service ban reduced gasoline prices by 4.4 cents per gallon in affected Oregon counties. This effect represents approximately $90 in expected annual savings for a household with three licensed drivers.