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Short-run price and income elasticity of gasoline demand: Evidence from Lebanon


  • Ben Sita, Bernard
  • Marrouch, Walid
  • Abosedra, Salah


We empirically estimate the demand for gasoline in the presence of multiple shifts caused by structural breaks using monthly data from Lebanon covering the period 2000:M1–2010:M12. Consistent with most studies in the literature, our study reports that gasoline is price and income inelastic in the short-run. However, when a single and multiple breaks are introduced, the consumers’ responsiveness to gasoline price and income increase. Since both price and income elasticity are sensitive to structural changes, a policy that pleads for a flat excise tax may not be optimal with respect to either the cyclical pattern of government revenues or the internalization of international environment standards.

Suggested Citation

  • Ben Sita, Bernard & Marrouch, Walid & Abosedra, Salah, 2012. "Short-run price and income elasticity of gasoline demand: Evidence from Lebanon," Energy Policy, Elsevier, vol. 46(C), pages 109-115.
  • Handle: RePEc:eee:enepol:v:46:y:2012:i:c:p:109-115 DOI: 10.1016/j.enpol.2012.03.041

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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. 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, vol. 10(1), pages 68-88.
    3. Wakamatsu, Hiroki & Aruga, Kentaka, 2013. "The impact of the shale gas revolution on the U.S. and Japanese natural gas markets," Energy Policy, Elsevier, vol. 62(C), pages 1002-1009.
    4. Wakamatsu, Hiroki & Miyata, Tsutomu, 2014. "Do Radioactive Spills from the Fukushima Disaster Have any Influence on Seafood Market in Japan?," MPRA Paper 55667, University Library of Munich, Germany, revised 18 Jun 2014.
    5. Hiroki Wakamatsu & Tsutomu Miyata, 2016. "Do Radioactive Spills from the Fukushima Disaster Have Any Influence on the Japanese Seafood Market?," Marine Resource Economics, University of Chicago Press, vol. 31(1), pages 27-45.
    6. 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.
    7. repec:eee:eneeco:v:64:y:2017:i:c:p:91-104 is not listed on IDEAS
    8. Wittmann, Nadine, 2014. "Regulating gasoline retail markets: The case of Germany," Economics Discussion Papers 2014-17, Kiel Institute for the World Economy (IfW).
    9. Bigerna, S. & Bollino, C.A. & Micheli, S. & Polinori, P., 2017. "Revealed and stated preferences for CO2 emissions reduction: The missing link," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1213-1221.

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    Gasoline demand; Elasticity; Structural breaks;


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