Thursday, September 07, 2006

Gas Stations and Convenience Stores

A commenter, JerseyKnave, left the following note in my most recent post on the relationship between self-service laws, gas stations, and convenience stores:
Well as a resident of NJ, I would speculate that the number is low because when building new gas stations adding a conveinence store would be unwise because there are alreay enough conveinence stores around.

If you're building an Exxon next to a Wawa I don't think your Tiger Mart is going to do enough business to make it worthwhile.

I also believe Full Service does have a large contributing factor.

Complementary stats that show % of conveinence stores not in gas stations would be most interesting.
OK, let's see, again using the 2002 Economic Census:
If it's hard to read, click on it, and view the larger version. Anyway, the states we care about are, mainly, Oregon and New Jersey. If you recall, in the last post, we saw that despite having a full-service only law for gas stations, Oregon was #3 nation-wide in terms of the lowest % of gas stations with convenience stores attached. Here was the "top" five:

State
% of Gas Stations w/ Conv. Store
New Jersey
25.2%
Massachusetts
47.3%
Oregon
53.0%
Connecticut
57.9%
New York
59.7%

New Jersey was, as expected, in a world of its own. But Oregon didn't stand out. I postulated that it had something to do with the geography of the states (Oregon is the only one of those 5 not in the Northeast). That may be, looking at the big table above, we can also see that New Jersey is an extreme outlier in terms of the % of convenience stores that are not in gas stations, with only 30.7% of its convenience stores in gas stations. DC is close at 32.7%, but the next closest is Massachusetts at 46.5%. The others on that list above: Oregon is next at 50.2%, Connecticut is 12th at 67.9%, and New York is 8th at 62.6%.

So, as the commenter suggested, it seems that New Jersey has the vast majority of its convenience stores outside of gas stations, but doesn't seem to be much more of an outlier here than it did it terms of the % of gas stations with convenience stores. This probably isn't surprising, because the two measurements are pretty similar. If all your gas stations have convenience stores, then most of your convenience stores are likely to be in gas stations. And it doesn't really speak to causality at all. But it is interesting.

My gut is still that the reason Oregon doesn't look like NJ, but rather looks like northeastern states that allow self-service gas stations is that Oregon's geography would tend to give it a *very high* fraction of gas stations with convenience stores, but its full-service law brings it down to look like Northeastern states whose geography leads to fewer gas station-convenience store hybrids. Oregon's neighbors (Washington, Idaho, Nevada, and California) all have high percentages of gas stations with convenience stores (82.1%, 80.4%, 85.1%, and 69.9%). So Oregon is more than 26% points lower than the average of its neighbors, which is similar to the difference between New Jersey and the other northeastern states on in the table above.

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