Estimating the supply and demand of gasoline using tax data

David Coyle, Jason DeBacker () and Richard Prisinzano

Energy Economics, 2012, vol. 34, issue 1, 195-200

Abstract: We estimate supply and demand functions for the U.S. gasoline market using information from excise tax returns provided by the IRS for the period 1990–2009. We find price and income elasticities of demand similar to those found using EIA data. We find a price elasticity of supply of 0.29, which differs from the common assumption of a perfectly inelastic short-run supply curve. By using a novel data source, the analysis provides a robustness check of aggregate studies of gasoline demand and a consistent, econometric estimate of the price elasticity of gasoline supply. The results are useful in guiding tax and regulatory policies regarding gasoline consumption.

Keywords: Gasoline demand; Gasoline supply; Excise taxes (search for similar items in EconPapers)
JEL-codes: Q41 Q48 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:1:p:195-200

DOI: 10.1016/j.eneco.2011.07.011

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