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The demand for road diesel in Canada

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  • Barla, Philippe
  • Gilbert-Gonthier, Mathieu
  • Kuelah, Jean-René Tagne

Abstract

In this paper, we estimate the demand for road diesel in Canada using aggregate annual data for the period 1986–2008. Using a partial adjustment model (PAM), we find short and long run price elasticities of −0.43 and −0.8 respectively. However, using cointegration techniques, we obtain price elasticities that are 30 to 50% lower. The short run elasticity with respect to GDP per capita is evaluated at 0.5 with the PAM and 1.55 with cointegration. In the long run, both estimation techniques indicate an income elasticity around 0.9. Our results underline the importance of controlling for the expansion of the primary sector which has been characterizing the Canadian economy in the 2000s.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:eneeco:v:43:y:2014:i:c:p:316-322
    DOI: 10.1016/j.eneco.2014.03.008
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    Cited by:

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    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. Ghoddusi, Hamed & Morovati, Mohammad & Rafizadeh, Nima, 2022. "Dynamics of fuel demand elasticity: Evidence from Iranian subsidy reforms," Energy Economics, Elsevier, vol. 110(C).
    5. Motamedi, Sina, 2016. "The Effect of Changes in Fuel Prices on the Use of Road Transportation in Ontario," 57th Transportation Research Forum (51st CTRF) Joint Conference, Toronto, Ontario, May 1-4, 2016 319275, Transportation Research Forum.
    6. 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.
    7. Jean-Thomas Bernard & Maral Kichian, 2017. "Carbon Tax Saliency: The Case of B.C. Diesel Demand," Working Papers 1718E, University of Ottawa, Department of Economics.
    8. Bernard, Jean-Thomas & Kichian, Maral, 2019. "The long and short run effects of British Columbia's carbon tax on diesel demand," Energy Policy, Elsevier, vol. 131(C), pages 380-389.
    9. Bigerna, S. & Bollino, C.A. & Micheli, S. & Polinori, P., 2017. "Revealed and stated preferences for CO2 emissions reduction: The missing link," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1213-1221.

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    More about this item

    Keywords

    Road diesel; Demand; Elasticity; Partial adjustment model; Cointegration;
    All these keywords.

    JEL classification:

    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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