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Gasoline and Diesel Demand in Europe: New Insights

Author

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  • Pock, Markus

    (Department of Economics and Finance, HealthEcon, Institute for Advanced Studies, Vienna, Austria)

Abstract

This study utilizes a panel data set from 14 European countries over the period 1990-2004 to estimate a dynamic model specification for gasoline and diesel demand. Previous studies estimating gasoline consumption per total passenger cars ignore the recent increase in the number of diesel cars in most European countries leading to biased elasticity estimates. We apply several common dynamic panel estimators to our small sample. Results show that specifications neglecting the share of diesel cars overestimate short-run income, price and car ownership elasticities. It appears that the results of standard pooled estimators are more reliable than common IV/GMM estimators applied to our small data set.

Suggested Citation

  • Pock, Markus, 2007. "Gasoline and Diesel Demand in Europe: New Insights," Economics Series 202, Institute for Advanced Studies.
  • Handle: RePEc:ihs:ihsesp:202
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    File URL: http://www.ihs.ac.at/publications/eco/es-202.pdf
    File Function: First version, 2007
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    References listed on IDEAS

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    Cited by:

    1. Bajo-Buenestado, Raúl, 2016. "Evidence of asymmetric behavioral responses to changes in gasoline prices and taxes for different fuel types," Energy Policy, Elsevier, vol. 96(C), pages 119-130.
    2. Agnolucci, Paolo, 2009. "The energy demand in the British and German industrial sectors: Heterogeneity and common factors," Energy Economics, Elsevier, vol. 31(1), pages 175-187, January.
    3. Wadud, Zia, 2016. "Diesel demand in the road freight sector in the UK: Estimates for different vehicle types," Applied Energy, Elsevier, vol. 165(C), pages 849-857.
    4. Barla, Philippe & Gilbert-Gonthier, Mathieu & Kuelah, Jean-René Tagne, 2014. "The demand for road diesel in Canada," Energy Economics, Elsevier, vol. 43(C), pages 316-322.

    More about this item

    Keywords

    Dynamic panel data; Gasoline demand; Error components; Omitted variable;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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