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Spatial Panel Data Models and Fuel Demand in Brazil

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  • dos Santos, Gervásio
  • Faria, Weslem

Abstract

The objective of this paper is to estimate the price and income elasticity for gasoline and ethanol in the fuel market for light vehicles in Brazil using spatial panel data models. Besides diversification, there are spatial features of fuel demand and supply that might influence heterogeneity in the behavior of regional consumers. Consumer behavior is heterogeneous and directly and indirectly influenced by different supply gaps and transportation and distribution costs. Thus, spatial panel data models are used to estimate price and income elasticities of gasoline and ethanol. The spatial heterogeneity and autocorrelation in the regional consumer preferences are controlled. Results showed that, aside strong evidence of the influence of spatial autocorrelation in the consumption of gasoline and ethanol, there also is a considerable competition between these fuels, mainly due to the flex-fuel technology.

Suggested Citation

  • dos Santos, Gervásio & Faria, Weslem, 2012. "Spatial Panel Data Models and Fuel Demand in Brazil," TD NEREUS 10-2012, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    • Handle: RePEc:ris:nereus:2012_010
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    References listed on IDEAS

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    2. Huntington, Hillard G. & Barrios, James J. & Arora, Vipin, 2019. "Review of key international demand elasticities for major industrializing economies," Energy Policy, Elsevier, vol. 133(C).
    3. Leonardo Chaves Borges Cardoso & Maurício Vaz Lobo Bittencourt & Alexandre Alves Porsse, 2014. "Demanda Por Combustíveis Leves No Brasil: Uma Abordagem Utilizando Painéis Espaciais Dinâmicos," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41st Brazilian Economics Meeting] 194, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
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    5. Ahmad, Mahyudin & Hall, Stephen G. & Law, Siong Hook & Nayan, Sabri, 2023. "The spillover effects of financial development and institutions on economic growth in emerging economies: new insights from spatial Durbin approach," MPRA Paper 118966, University Library of Munich, Germany.

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    More about this item

    Keywords

    income elasticity; fuel demand; spatial panel data; Brazil;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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