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Demand for Gasoline Is More Price-Inelastic than Commonly Thought

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

No 2011/10, Working Papers IES from Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies

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 and 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)
Pages: 11
Date: 2011-03, Revised 2011-03
New Economics Papers: this item is included in nep-ene
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Citations: View citations in EconPapers (26) Track citations by RSS feed

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Related works:
Journal Article: Demand for gasoline is more price-inelastic than commonly thought (2012) 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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