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Demand for gasoline is more price-inelastic than commonly thought

Tomas Havranek (), Zuzana Irsova () and Karel Janda ()

Energy Economics, 2012, vol. 34, issue 1, 201-207

Abstract: One of the most frequently examined statistical relationships in energy economics has been the price elasticity of gasoline demand. We conduct a quantitative survey of the estimates of elasticity reported for various countries around the world. Our meta-analysis indicates that the literature suffers from publication selection bias: insignificant or positive estimates of the price elasticity are rarely reported, although implausibly large negative estimates are reported regularly. In consequence, the average published estimates of both short- and long-run elasticities are exaggerated twofold. Using mixed-effects multilevel meta-regression, we show that after correction for publication bias the average long-run elasticity reaches −0.31 and the average short-run elasticity only −0.09.

Keywords: Gasoline demand; Price elasticity; Meta-analysis; Publication selection bias (search for similar items in EconPapers)
JEL-codes: C83 Q41 Q48 (search for similar items in EconPapers)
Date: 2012
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Related works:
Working Paper: Demand for gasoline is more price-inelastic than commonly thought (2011) Downloads
Working Paper: Demand for gasoline is more price-inelastic than commonly thought (2011) Downloads
Working Paper: Demand for Gasoline Is More Price-Inelastic than Commonly Thought (2011) Downloads
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