The impact of process innovation on prices Evidence from automated fuel retailing in The Netherlands

In the last decade, many European countries have seen a sharp increase in the number of automated fueling stations. We study the effect of this process innovation on prices at stations that are automated and their competitors using a difference-in-differences matching strategy. Our estimates show that prices at automated stations drop by 1.7 to 3.2% immediately after conversion and stabilize at this lower level. Unlike previous studies, our estimates do not reveal a difference in impact between early and later adopters of automation. Indicative of competitive spillovers, prices at stations within 2 km of an automated station decrease on average with a precisely estimated 0.2%.