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Estimating the demand for gasoline in developing countries: Senegal

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  • Sene, Seydina Ousmane

Abstract

This paper estimates the aggregate demand for gasoline in Senegal from 1970 to 2008. The long-term and short-term elasticities of demand with respect to gasoline prices and income are of paramount interest in this study. In Senegal, rising food prices, unemployment and shortage of electric supply are always associated with the spiking cost of world oil prices. To understand the external shocks of world oil price and demand for gasoline in Senegal, this study tested a log linear model against the linear model of the demand-for-oil function with lagged dependent variables as an explanatory variable. Here, the linear specification of the demand for oil is rejected in this study in favor of the log linear. The natural log transformation is typical when using high frequency data and significantly reduces skewness and kurtosis. Generally in this study, I found that short run elasticity is smaller than long-run elasticity and gasoline demand is inelastic with respect to both price and income for both the short and long runs in Senegal. This is why researcher like Moosa posits that "this assertion can be rationalised on the grounds that oil is such an important commodity that does not have close substitutes at least for its uses" (1998, p. 3).

Suggested Citation

  • Sene, Seydina Ousmane, 2012. "Estimating the demand for gasoline in developing countries: Senegal," Energy Economics, Elsevier, vol. 34(1), pages 189-194.
  • Handle: RePEc:eee:eneeco:v:34:y:2012:i:1:p:189-194 DOI: 10.1016/j.eneco.2011.04.014
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    Cited by:

    1. Bakhat, Mohcine & Rosselló, Jaume, 2013. "Evaluating a seasonal fuel tax in a mass tourism destination: A case study for the Balearic Islands," Energy Economics, Elsevier, pages 12-18.
    2. Adom, Philip Kofi & Amakye, Kwaku & Barnor, Charles & Quartey, George & Bekoe, William, 2016. "Shift in demand elasticities, road energy forecast and the persistence profile of shocks," Economic Modelling, Elsevier, vol. 55(C), pages 189-206.
    3. Lu-Yi Qiu & Ling-Yun He, 2016. "Are Chinese transport policies effective? A new perspective from direct pollution rebound effect, and empirical evidence from road transport sector," Papers 1612.02653, arXiv.org.
    4. Kenneth Gillingham & David Rapson & Gernot Wagner, 2016. "The Rebound Effect and Energy Efficiency Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, pages 68-88.
    5. Chai, Jian & Yang, Ying & Wang, Shouyang & Lai, Kin Keung, 2016. "Fuel efficiency and emission in China's road transport sector: Induced effect and rebound effect," Technological Forecasting and Social Change, Elsevier, pages 188-197.
    6. Keho, Yaya, 2016. "What drives energy consumption in developing countries? The experience of selected African countries," Energy Policy, Elsevier, vol. 91(C), pages 233-246.
    7. Odeck, James & Johansen, Kjell, 2016. "Elasticities of fuel and traffic demand and the direct rebound effects: An econometric estimation in the case of Norway," Transportation Research Part A: Policy and Practice, Elsevier, vol. 83(C), pages 1-13.
    8. Mohamad Taghvaee, Vahid & Hajiani, Parviz, 2014. "Price and Income Elasticities of Gasoline Demand in Iran: Using Static, ECM, and Dynamic Models in Short, Intermediate, and Long Run," MPRA Paper 70054, University Library of Munich, Germany.
    9. Adewuyi, Adeolu O., 2016. "Determinants of import demand for non-renewable energy (petroleum) products: Empirical evidence from Nigeria," Energy Policy, Elsevier, vol. 95(C), pages 73-93.
    10. Kyoung-Min Lim & Myunghwan Kim & Chang Seob Kim & Seung-Hoon Yoo, 2012. "Short-Run and Long-Run Elasticities of Diesel Demand in Korea," Energies, MDPI, Open Access Journal, vol. 5(12), pages 1-10, November.
    11. repec:eee:eneeco:v:64:y:2017:i:c:p:91-104 is not listed on IDEAS
    12. Sadri, A. & Ardehali, M.M. & Amirnekooei, K., 2014. "General procedure for long-term energy-environmental planning for transportation sector of developing countries with limited data based on LEAP (long-range energy alternative planning) and EnergyPLAN," Energy, Elsevier, vol. 77(C), pages 831-843.
    13. Lu-Yi Qiu & Ling-Yun He, 2017. "Are Chinese Green Transport Policies Effective? A New Perspective from Direct Pollution Rebound Effect, and Empirical Evidence From the Road Transport Sector," Sustainability, MDPI, Open Access Journal, vol. 9(3), pages 1-11, March.
    14. Kenneth Gillingham & David Rapson & Gernot Wagner, 2016. "The Rebound Effect and Energy Efficiency Policy," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, pages 68-88.

    More about this item

    Keywords

    Gasoline demand; Oil; Food prices; Consumption; Elasticity; Income; Unemployment; Senegal;

    JEL classification:

    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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