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Income Elasticity of Gasoline Demand: A Meta-Analysis

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Abstract

In this paper we quantitatively synthesize empirical estimates of the income elasticity of gasoline demand reported in previous studies. The studies cover many countries and report a mean elasticity of 0.28 for the short run and 0.66 for the long run. We show, however, that these mean estimates are biased upwards because of publication bias—the tendency to suppress negative and insignificant estimates of the elasticity. Using mixed-effects multilevel meta-regression we filter out publication bias from the literature. Our results suggest that the income elasticity of gasoline demand is smaller than commonly thought: the corrected estimate is 0.1 for the short run and 0.46 for the long run.

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  • Tomas Havranek & Ondrej Kokes, 2013. "Income Elasticity of Gasoline Demand: A Meta-Analysis," Working Papers IES 2013/02, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2013.
  • Handle: RePEc:fau:wpaper:wp2013_02
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    Cited by:

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    3. Mensah, Justice Tei & Marbuah, George & Amoah, Anthony, 2016. "Energy demand in Ghana: A disaggregated analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 53(C), pages 924-935.
    4. Burke, Paul J. & Yang, Hewen, 2016. "The price and income elasticities of natural gas demand: International evidence," Energy Economics, Elsevier, vol. 59(C), pages 466-474.
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    7. Hasanov, Mübariz, 2015. "The demand for transport fuels in Turkey," Energy Economics, Elsevier, vol. 51(C), pages 125-134.
    8. Havranek, Tomas & Rusnak, Marek & Sokolova, Anna, 2017. "Habit formation in consumption: A meta-analysis," European Economic Review, Elsevier, pages 142-167.
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    Keywords

    Gasoline; income elasticity; publication bias; meta-analysis;

    JEL classification:

    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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