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Are Gasoline Demand Elasticities Different across Cities?

Philippe Barla, Markus Herrmann (), Carlos Ordas-Criado and Luis F. Miranda-Moreno
Authors registered in the RePEc Author Service: Carlos Ordás Criado ()

Cahiers de recherche CREATE from CREATE

Abstract: In this paper, we examine the heterogeneity in gasoline demand price and income elasticities across 40 cities in the province of Quebec Canada using quarterly data over the 2004 to 2009 period. We reject the hypothesis of identical elasticities across markets. However, the range of values for the price elasticity, between -0.65 and -0.14, is relatively narrow and confirms that the demand for gasoline is price inelastic. We find evidence that the average price and income elasticity is somewhat larger in markets with public transportation. Furthermore, these markets experience a strong declining trend in gasoline use per capita.

Keywords: Gasoline demand; price and income elasticities; random coefficient model; peak car hypothesis (search for similar items in EconPapers)
JEL-codes: C33 D12 Q41 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-ene and nep-tre
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