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Estimating the Cross-Price Elasticity of Regular Gasoline with Respect to the Price of Premium Gasoline
Colorado School of Mines.
Luleå University of Technology, Department of Business Administration, Technology and Social Sciences, Social Sciences. Mineral and Energy Economics Program and Payne Institute of Earth Resources, Division of Economics and Business, Colorado School of Mines, Golden, CO .
2018 (English)In: Journal of Transport Economics and Policy, ISSN 0022-5258, E-ISSN 1754-5951, Vol. 52, no 2, p. 157-180Article in journal (Refereed) Published
Abstract [en]

Gasoline demand has been extensively researched, yet there has been no attempt to estimate cross-price elasticities of different grades of gasoline. Such knowledge will allow accurate determination of the impact of a fuel pricing policy that has different rates of tax or subsidy depending on the gasoline grade. Using monthly data on the Mexican gasoline market from 1999 to 2014, regular gasoline demand is estimated with an ARDL model. Endogeneity of the price and structural break are also investigated. The cross-price elasticity between regular and premium gasoline is found to be 0.875, confirming high substitutability among gasoline with different grades.

Place, publisher, year, edition, pages
University of Bath , 2018. Vol. 52, no 2, p. 157-180
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:ltu:diva-66518OAI: oai:DiVA.org:ltu-66518DiVA, id: diva2:1155725
Note

Validerad;2018;Nivå 2;2018-08-15 (svasva)

Available from: 2017-11-09 Created: 2017-11-09 Last updated: 2018-08-16Bibliographically approved

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https://www.ingentaconnect.com/contentone/lse/jtep/2018/00000052/00000002/art00005?crawler=true#expand/collapse

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Dahl, Carol

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