‘On the Road Again’: A 118 country panel analysis of gasoline and diesel demand

Brantley Liddle and Hillard Huntington

Transportation Research Part A: Policy and Practice, 2020, vol. 142, issue C, 151-167

Abstract: The current paper contributes to the literature on the relationship between economic growth, fuel prices, and the demand for gasoline and diesel within the transportation sector by assembling a wide panel dataset of fuel consumption and prices for 35 OECD and 83 Non-OECD countries. The unbalanced data spans 1978–2016, with the full 39 years of data for 36 countries. In addition, our dynamic panel estimates address nonstationarity, heterogeneity, and cross-sectional dependence. The OECD panel price elasticity for gasoline is around −0.7 or about three times that for the non-OECD panel; whereas, the OECD price elasticity for diesel is only modestly larger (in absolute terms) than the non-OECD elasticity (−0.3 and −0.2, respectively). For gasoline, the non-OECD GDP elasticity is around 1.0 or about twice that for OECD countries. For the OECD panel, the diesel GDP elasticity is about three times that of the OECD GDP elasticity for gasoline; whereas, for the non-OECD panel, the two GDP elasticities (for gasoline and diesel) are about the same. For non-OECD countries, subpanels based on geography and income produced mostly similar results. We found no evidence of GDP or price asymmetric effects for the 1978–2016 period. Lastly, the large (at least for the OECD panel) and statistically significant transportation price elasticities reported here provide stark contrast to the economy-wide energy price elasticities calculated in Liddle and Huntington (2020a).

Keywords: Road transportation energy use; Energy prices; Common factor panel models; Gasoline and diesel elasticity estimates; Dynamic models; OECD and Non-OECD panels (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0965856420307606
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transa:v:142:y:2020:i:c:p:151-167

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.tra.2020.10.015

Access Statistics for this article

Transportation Research Part A: Policy and Practice is currently edited by John (J.M.) Rose

More articles in Transportation Research Part A: Policy and Practice from Elsevier
Bibliographic data for series maintained by Catherine Liu ().