Demand for Ground Transportation Fuel and Pricing Policy in Asian Tigers: A Comparative Study of Korea and Taiwan

Sara Banaszak, Ujjayant Chakravorty and PingSun Leung

The Energy Journal, 1999, vol. 20, issue 2, 145-165

Abstract: This paper examines the demand for gasoline and diesel in the ground transportation sectors of South Korea and Taiwan, comparing the effects of their different pricing policies and stages of economic growth. To account for substitutability between the two fuels, the model proposed here uses a system of equations estimated simultaneously with time-series data from 1973-1992. Results yield demand elasticities that confirm previous research showing that oil product demand is generally price inelastic, while income elasticities (reflecting a longer period of economic growth than previous studies in the Asian region) are lower than those previously reported. The estimated demand functions are then used to generate forecasts for both countries and, in particular, for an assumed reduction in a 180% tax on gasoline in Korea. Forecasted increases in demand by the year 2010 range from 40 to 180%, while the tax analysis suggests that Korea's pricing policy has reduced total demand and promoted the use of diesel over gasoline.

Keywords: gasoline demand; diesel demand; fuel substitution; Fuel pricing policy; system of equations (search for similar items in EconPapers)
Date: 1999
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.5547/ISSN0195-6574-EJ-Vol20-No2-6 (text/html)

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:sae:enejou:v:20:y:1999:i:2:p:145-165

DOI: 10.5547/ISSN0195-6574-EJ-Vol20-No2-6

Access Statistics for this article

More articles in The Energy Journal
Bibliographic data for series maintained by SAGE Publications ().