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Disaggregate Analysis of the Demand for Gasoline

Author

Listed:
  • Michael K. Berkowitz
  • Nancy Gallini
  • Eric Miller
  • Rob Wolfe

Abstract

In this paper, we adopt a disaggregate approach to modeling the components of gasoline demand. Gasoline demand in our model is viewed as the outcome of the following household decisions: vehicle holdings (number and type) and vehicle usage (nondiscretionary and discretionary usage). Modeling gasoline demand in this way correctly specifies gasoline as an input into the production of transportation services and allows for the interdependence between household decisions on vehicle holdings and usage. Moreover, estimation of the components of gasoline demand allows policymakers to identify the means by which individuals will respond to policy changes. This leads to more effective policies designed to reduce gasoline consumption. We use this model to estimate price and fuel efficiency elasticities of vehicle usage and gasoline demand.

Suggested Citation

  • Michael K. Berkowitz & Nancy Gallini & Eric Miller & Rob Wolfe, 1990. "Disaggregate Analysis of the Demand for Gasoline," Canadian Journal of Economics, Canadian Economics Association, vol. 23(2), pages 253-275, May.
    • Handle: RePEc:cje:issued:v:23:y:1990:i:2:p:253-75
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    Cited by:

    1. Spiller, Elisheba & Stephens, Heather M. & Chen, Yong, 2017. "Understanding the heterogeneous effects of gasoline taxes across income and location," Resource and Energy Economics, Elsevier, vol. 50(C), pages 74-90.
    2. Asensio, Javier & Matas, Anna & Raymond, Jose-Luis, 2003. "Petrol expenditure and redistributive effects of its taxation in Spain," Transportation Research Part A: Policy and Practice, Elsevier, vol. 37(1), pages 49-69, January.
    3. De Borger, Bruno & Mulalic, Ismir & Rouwendal, Jan, 2016. "Substitution between cars within the household," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 135-156.
    4. Michaelis, Laurie & Davidson, Ogunlade, 1996. "GHG mitigation in the transport sector," Energy Policy, Elsevier, vol. 24(10-11), pages 969-984.
    5. Tenkorang, Frank & Dority, Bree L. & Bridges, Deborah & Lam, Eddery, 2015. "Relationship between ethanol and gasoline: AIDS approach," Energy Economics, Elsevier, vol. 50(C), pages 63-69.
    6. Eltony, M. N. & Al-Mutairi, N. H., 1995. "Demand for gasoline in Kuwait : An empirical analysis using cointegration techniques," Energy Economics, Elsevier, vol. 17(3), pages 249-253, July.
    7. de Freitas, Luciano Charlita & Kaneko, Shinji, 2011. "Ethanol demand under the flex-fuel technology regime in Brazil," Energy Economics, Elsevier, vol. 33(6), pages 1146-1154.
    8. Javier Asensio & Anna Matas & José Luis Raymond, 2001. "Petrol consumption and redistributive effects of its taxation in Spain," Working Papers wp0109, Department of Applied Economics at Universitat Autonoma of Barcelona.
    9. Nagy Eltony, M., 1996. "Demand for gasoline in the GCC: an application of pooling and testing procedures," Energy Economics, Elsevier, vol. 18(3), pages 203-209, July.
    10. John Eakins, 2013. "The Determinants of Household Car Ownership: Empirical Evidence from the Irish Household Budget Survey," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 144, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
    11. Nolan, Anne, 2010. "A dynamic analysis of household car ownership," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(6), pages 446-455, July.
    12. Spiller, Elisheba & Stephens, Heather M., 2012. "The Heterogeneous Effects of Gasoline Taxes: Why Where We Live Matters," RFF Working Paper Series dp-12-30, Resources for the Future.
    13. Bureau, Benjamin, 2011. "Distributional effects of a carbon tax on car fuels in France," Energy Economics, Elsevier, vol. 33(1), pages 121-130, January.
    14. Philippe Barla & Bernard Lamonde & Luis Miranda-Moreno & Nathalie Boucher, 2009. "Traveled distance, stock and fuel efficiency of private vehicles in Canada: price elasticities and rebound effect," Transportation, Springer, vol. 36(4), pages 389-402, July.
    15. West, Sarah E., 2004. "Distributional effects of alternative vehicle pollution control policies," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 735-757, March.
    16. Alan Macnaughton, 1992. "Fringe benefits and employee expenses: Tax planning and neutral tax policy," Contemporary Accounting Research, John Wiley & Sons, vol. 9(1), pages 113-137, September.
    17. Thomas S. Dee & William N. Evans, 2001. "Teens and Traffic Safety," NBER Chapters, in: Risky Behavior among Youths: An Economic Analysis, pages 121-166, National Bureau of Economic Research, Inc.

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