Why Does Gas Cost More in “Bad” Neighborhoods?

My place of employment is in a fine section of town, but you’re only about 2 blocks away from a bad neighborhood.  Gas stations in this area are routinely 10 to 15 cents per gallon higher than where I live, which is actually further out from main traffic arteries.  I’ve noticed this elsewhere and haven’t been able to make heads or tails of it.  One gas station in particular is notoriously high.  Some qualifiers:

  • This station is only blocks from three other gas stations in the same bad stretch of town
  • It is part of one of the larger chains in the area (and the same as the one by my house)
  • It is not out of the way or otherwise secluded

Any thoughts?  Is there some obvious socioeconomic reason I’m not seeing for why the ghetto gas station is higher than nearby, more desirable areas, when all transport and demand variables seem equal?

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2 Comments

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2 responses to “Why Does Gas Cost More in “Bad” Neighborhoods?

  1. I’ve always found gas to be cheaper in the poorer neighborhoods around me. The cheaper property tax and lower income = lower gas prices. I always fill up in the projects and save at least $.10 a gallon.

  2. SBR&R

    Perhaps this is just a local/regional phenomenon I’m experiencing? It’s always stuck out as odd that this one station would be $.10 higher than other stations 3 blocks up the road (still in bad neighborhood), which are $.05 higher than better areas less than a mile away.

    I would hate to think that the station owner figured out that the customers in his part of town aren’t overly discerning about price. But I suppose that’s a possibility.

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