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Estimating petroleum products demand elasticities in Nigeria: A multivariate cointegration approach

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  • Iwayemi, Akin
  • Adenikinju, Adeola
  • Babatunde, M. Adetunji
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    Abstract

    This paper formulates and estimates petroleum products demand functions in Nigeria at both aggregative and product level for the period 1977 to 2006 using multivariate cointegration approach. The estimated short and long-run price and income elasticities confirm conventional wisdom that energy consumption responds positively to changes in GDP and negatively to changes in energy price. However, the price and income elasticities of demand varied according to product type. Kerosene and gasoline have relatively high short-run income and price elasticities compared to diesel. Overall, the results show petroleum products to be price and income inelastic.

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    Bibliographic Info

    Article provided by Elsevier in its journal Energy Economics.

    Volume (Year): 32 (2010)
    Issue (Month): 1 (January)
    Pages: 73-85

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    Handle: RePEc:eee:eneeco:v:32:y:2010:i:1:p:73-85

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    Web page: http://www.elsevier.com/locate/eneco

    Related research

    Keywords: Petroleum products Price elasticity Income elasticity Cointegration;

    References

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    Cited by:
    1. Leng Wong, Siang & Chia, Wai-Mun & Chang, Youngho, 2013. "Energy consumption and energy R&D in OECD: Perspectives from oil prices and economic growth," Energy Policy, Elsevier, vol. 62(C), pages 1581-1590.
    2. Suleiman, Sa’ad & Muhammad, Shahbaz, 2012. "Price and Income Elasticities of Demand for Oil Products in African Member Countries of OPEC: A Cointegration Analysis," MPRA Paper 37390, University Library of Munich, Germany, revised 28 Feb 2012.
    3. Kouakou, Auguste K., 2011. "Economic growth and electricity consumption in Cote d'Ivoire: Evidence from time series analysis," Energy Policy, Elsevier, vol. 39(6), pages 3638-3644, June.
    4. Olusegun A. Omisakin & Abimbola M. Oyinlola & Oluwatosin A. Adeniyi, 2012. "Modeling Gasoline Demand with Structural Breaks:New Evidence from Nigeria," International Journal of Energy Economics and Policy, Econjournals, vol. 2(1), pages 1-9.
    5. Havranek, Tomas & Irsova, Zuzana & Janda, Karel, 2011. "Demand for gasoline is more price-inelastic than commonly thought," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0m94j50t, Department of Agricultural & Resource Economics, UC Berkeley.
    6. Olusegun A. Omisakin & Oluwatosin A. Adeniyi & Abimbola M. Oyinlola, 2012. "Structural Breaks, Parameter Stability and Energy Demand Modeling in Nigeria," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 5(2), pages 129-144, August.

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