What do we know about gasoline demand elasticities?

This survey of surveys contains an historical summary of what I knew about short- and long-run gasoline demand elasticities as of 2006. I discuss 13 surveys published from 1977-2004 along with a few additional studies. Although there is wide variation in price and income elasticities across the more than 100 studies surveyed across time, all of these surveys conclude that gasoline consumption does respond to price, and most of them come to a quantitative conclusion about summary values for the price elasticity. The majority conclude that a good representative short-run price elasticity (annual) is between -0.2 and -0.3 with a good long-run representative value between -0.6 and -0.9. There is somewhat less interest and agreement on representative income elasticities, especially in the long-run. Where reported and concluded short-run representative income elasticities (annual) are between 0.3 and 0.5 but long-run representative income elasticities range between 0.5 and 1.5. A number of reasons are thought to contribute to this wide long-run variation in income elasticity. In the ever popular Koyck models, collinearity between the lagged endogenous variable, price, and income seem to contribute to high variation in the income elasticity. I also believe that the increased popularity of error correction models over time has also led to smaller long-run income elasticities. Long-run income elasticities once seemed to be in the inelastic region for industrial countries, which were relatively saturated in vehicles, and the elastic range in developing countries, which were becoming rich enough to rapidly increase their vehicle stock. More recently vehicle efficiency standards and movements towards ever more efficient vehicles by the world's major car manufacturers have likely decreased income elasticities. Increased income means more cars but ones that are on average newer and more efficient. Thus the spatial and temporal dimensions, policy, and the methodologies of the studies surveyed may be influencing the wider variation in long-run income elasticities.