Gasoline price volatility and the elasticity of demand for gasoline

C.-Y. Cynthia Lin Lawell and Lea Prince

Energy Economics, 2013, vol. 38, issue C, 111-117

Abstract: We examine how gasoline price volatility impacts consumers' price elasticity of demand for gasoline. Results show that volatility in prices decreases consumer demand for gasoline in the intermediate run. We also find that consumers appear to be less elastic in response to changes in gasoline price when gasoline price volatility is medium or high, compared to when it is low. Moreover, we find that when we control for variance in our econometric model, gasoline price elasticity of demand is lower in magnitude in the long run.

Keywords: Gasoline demand elasticity; Gasoline price volatility (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (66)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:38:y:2013:i:c:p:111-117

DOI: 10.1016/j.eneco.2013.03.001

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