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Elasticity Analysis of Fossil Energy Sources for Sustainable Economies: A Case of Gasoline Consumption in Turkey

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  • Jeyhun I. Mikayilov

    (Energy and Macroeconomics, King Abdullah Petroleum Studies and Research Center, P.O. Box 88550, Riyadh 11672, Saudi Arabia)

  • Shahriyar Mukhtarov

    (Department of World Economy, Baku Engineering University, Baku AZ0101, Azerbaijan
    UNEC Empirical Research Center, Azerbaijan State University of Economics (UNEC), Istiqlaliyyat Str. 6, Baku AZ1141, Azerbaijan)

  • Hasan Dinçer

    (The School of Business, İstanbul Medipol University, İstanbul 34083, Turkey)

  • Serhat Yüksel

    (The School of Business, İstanbul Medipol University, İstanbul 34083, Turkey)

  • Rıdvan Aydın

    (The School of Business, İstanbul Medipol University, İstanbul 34083, Turkey)

Abstract

The current paper investigates the gasoline demand relationship in the case of Turkey, utilizing different econometric techniques and using quarterly data spanning from 2000Q1 to 2019Q1. The estimation results revealed that income and gasoline price are the main drivers of consumption. The found long-run income, price and auto stock elasticities are 0.25, −0.27 and −0.80, respectively. In addition, it is concluded that in the short-run, gasoline demand does not respond to changes in income, price and car stock. The estimation results also showed that the contribution of commercial and public car stock on gasoline demand is higher than that for private auto stock. Based on the finding of the study it is concluded that to achieve the optimal use of gasoline in line with providing high quality transport services, firstly, policies before the 2012 period can be followed. Secondly, channels such as pricing mechanism and taxation policies can be used in this framework.

Suggested Citation

  • Jeyhun I. Mikayilov & Shahriyar Mukhtarov & Hasan Dinçer & Serhat Yüksel & Rıdvan Aydın, 2020. "Elasticity Analysis of Fossil Energy Sources for Sustainable Economies: A Case of Gasoline Consumption in Turkey," Energies, MDPI, vol. 13(3), pages 1-15, February.
    • Handle: RePEc:gam:jeners:v:13:y:2020:i:3:p:731-:d:317837
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