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Never mind houses, what about gas/petrol? It always seems to be more expensive in dense cities, even though there is greater competition and economies of scale
by colmmacc 3y ago
Never mind houses, what about gas/petrol? It always seems to be more expensive in dense cities, even though there is greater competition and economies of scale (e.g. delivery of the fuel to the stations) while it tends to be cheaper in rural middle-of-nowheres, even if there is no immediate local competition. The cost of land and labor is higher, sure, but even the stations that are owned rather than rented don't seem to be much cheaper.
People in cities have higher incomes, and sellers - whether it's gas, rent, or property - are very adept as sussing out what the local market will bear and sustain. So they charge more. They have their own income and profit floors that they will resist breaking to compete on price, because they can see where a race to the bottom ends.
It wouldn't be surprising if a dynamic like that is a large part of these effects.
- deleted 3y ago[deleted]
- zamnos 3y agoWhat about gas/petrol? If your locality doesn't have the density to support useful public transportation, you live in the suburbs. It might be a giant sprawling suburb bigger than some cities, but that doesn't automatically make it a city. A city needs to have city-grade services in other to qualify as a city.
- Gigachad 3y agoThe price of petrol would be increasingly irrelevant the denser the area since you'd have better PT.
- Thorrez 3y ago>The cost of land and labor is higher, sure, but even the stations that are owned rather than rented don't seem to be much cheaper. They need the higher prices to recoup the higher costs of land: mortgage cost, property tax cost, opportunity cost of the land.
- konschubert 3y agoIf these petrol stations weren't earning so much, they would close and sell the lot for re-development. Which is what happened many times ... which is why the remaining ones can charge a bit more. A petrol station is not a charity... That being said, I agree that it seems unfair that people can just own a piece of land for generations and keep profiting off it. Which is true for real estate as well. A land value tax might help resolve this unfairness.