IDEAS home Printed from https://ideas.repec.org/a/ris/qjatoe/0176.html
   My bibliography  Save this article

Estimating gasoline product demand in Iran during the period from 1995 to 2017 using the state-space model and relevant guidelines for price liberalizations

Author

Listed:
  • Hashemi, Hooshmand

    (Ph.D student at Abhar Azad University)

  • Mohamadi, Teimor

    (Associate Professor of Economics (Corresponding Author), Allameh Tabatabaee University, Faculty of Economics, Tehran. Iran)

  • Khalili, Farzeneh

    (Assistant Professor of Economics, Abhar Azad University, Abhar, Iran)

  • Asgari, Farid

    (Assistant Professor of Economics, Abhar Azad University, Abhar, Iran)

Abstract

The purpose of this paper is to estimate the gasoline demand function via the state-space model and the implications for its price liberalization by using the Kalman filter method in the framework of time-varying coefficients model. For this purpose, data from the Energy Balance Sheet and the National Iranian Oil Refining and Distribution Company were used during the years 1374-1396. The results of the estimation of the model indicate that the price elasticity of gasoline varies in the studied period and after the implementation of subsidy targeting (1389 to 1396), in some of the seasons of the year, absolute value of the price elasticity of gasoline increased and decreased in some seasons. With three different scenarios, it is anticipated that with the increase of 10% in the price of gasoline in the sixth development plan, the demand for gasoline does not decrease unlike expectations. Also, because absolute value of the elasticity of the price of gasoline at the beginning of the sixth of developmental program is greater and lower at the end of the program, increasing of the price of the gasoline should not be the same over the program. It is recommended that planners and policymakers to control gasoline demand are advised to increase the price of gasoline in the sixth of developmental plan by more than 10 %, and this price increase from the beginning of the program to the end of the program is ascending

Suggested Citation

  • Hashemi, Hooshmand & Mohamadi, Teimor & Khalili, Farzeneh & Asgari, Farid, 2020. "Estimating gasoline product demand in Iran during the period from 1995 to 2017 using the state-space model and relevant guidelines for price liberalizations," Quarterly Journal of Applied Theories of Economics, Faculty of Economics, Management and Business, University of Tabriz, vol. 7(1), pages 1-28, May.
    • Handle: RePEc:ris:qjatoe:0176
    as

    Download full text from publisher

    File URL: https://ecoj.tabrizu.ac.ir/article_8919_a535d63e61d6a0a703f7ce43fd97b338.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Gasoline demand; State-space model; Kalman filter technique; Time varying coefficients;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:qjatoe:0176. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sakineh Sojoodi (email available below). General contact details of provider: https://edirc.repec.org/data/fetabir.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.