The choice of organizational form in gasoline retailing and the cost of laws that limit that choice

This paper uses a new data source to analyze the choice of organizational form of retail gasoline stations. In recent years, gasoline stations have tended to be less likely to be owned and operated by a lessee-dealer and more likely to be owned and operated by the refiner. We examine the determinants of organizational form and find them to be based on efficiency, not predatory concerns. We estimate the costs of recent laws that prohibit company ownership of gasoline stations and find that the annual cost of national divorcement legislation could easily exceed $1 billion.