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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (149)

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Working Paper: Demand for gasoline is more price-inelastic than commonly thought (2011)
Working Paper: Demand for gasoline is more price-inelastic than commonly thought (2011)
Working Paper: Demand for Gasoline Is More Price-Inelastic than Commonly Thought (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:34:y:2012:i:1:p:201-207

DOI: 10.1016/j.eneco.2011.09.003

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