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The Systemic, Long-run Relation among Gasoline Demand, Gasoline Price, Income, and Vehicle Ownership in OECD Countries: Evidence from Panel Cointegration and Causality Modeling

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  • Liddle, Brantley

Abstract

This paper analyzes gasoline consumption per capita, income (GDP per capita), gasoline price, and car ownership per capita for a panel of OECD countries by employing panel unit root and cointegration testing, panel Dynamic and Fully Modified OLS estimations, and panel Granger-causality tests. The four variables are determined to be panel I(1) and cointegrated. Estimated long-run and short-run income elasticities are smaller than what typically had been found previously. Lastly, gasoline consumption is Granger-caused by gasoline price, but not by car ownership or income; whereas, car ownership is Granger-caused by income and at the margin by gasoline consumption, but not by gasoline price.

Suggested Citation

  • Liddle, Brantley, 2012. "The Systemic, Long-run Relation among Gasoline Demand, Gasoline Price, Income, and Vehicle Ownership in OECD Countries: Evidence from Panel Cointegration and Causality Modeling," MPRA Paper 52081, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:52081
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Liddle, Brantley, 2013. "Population, Affluence, and Environmental Impact Across Development: Evidence from Panel Cointegration Modeling," MPRA Paper 52088, University Library of Munich, Germany.
    2. repec:eee:eneeco:v:68:y:2017:i:s1:p:66-80 is not listed on IDEAS
    3. repec:eee:transa:v:106:y:2017:i:c:p:22-50 is not listed on IDEAS
    4. repec:eee:trapol:v:65:y:2018:i:c:p:61-71 is not listed on IDEAS
    5. Ben Jebli, Mehdi & Belloumi, Mounir, 2017. "Investigation of the causal relationships between combustible renewables and waste consumption and CO2 emissions in the case of Tunisian maritime and rail transport," Renewable and Sustainable Energy Reviews, Elsevier, vol. 71(C), pages 820-829.
    6. Liddle, Brantley & Lung, Sidney, 2015. "Revisiting energy consumption and GDP causality: Importance of a priori hypothesis testing, disaggregated data, and heterogeneous panels," Applied Energy, Elsevier, vol. 142(C), pages 44-55.
    7. Liddle, Brantley & Lung, Sidney, 2013. "The long-run causal relationship between transport energy consumption and GDP: Evidence from heterogeneous panel methods robust to cross-sectional dependence," Economics Letters, Elsevier, vol. 121(3), pages 524-527.
    8. Ben Jebli, Mehdi, 2015. "The Impact of Combustible Renewables and Waste Consumption and Transport on the Environmental Degradation: The Case of Tunisia," MPRA Paper 68038, University Library of Munich, Germany.
    9. 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.
    10. Scott, K. Rebecca, 2015. "Demand and price uncertainty: Rational habits in international gasoline demand," Energy, Elsevier, vol. 79(C), pages 40-49.
    11. repec:spr:endesu:v:20:y:2018:i:3:d:10.1007_s10668-017-9922-z is not listed on IDEAS
    12. Zhang, Chuanguo & Nian, Jiang, 2013. "Panel estimation for transport sector CO2 emissions and its affecting factors: A regional analysis in China," Energy Policy, Elsevier, vol. 63(C), pages 918-926.

    More about this item

    Keywords

    gasoline demand elasticities; OECD countries; panel unit roots; panel cointegration; panel Dynamic OLS and Fully Modified OLS estimation; panel Granger-causality testing;

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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