Income elasticity of gasoline demand: A meta-analysis

Abstract

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How price inelastic is demand for gasoline in fuel-subsidizing economies?

“…In fact, it is so low that it falls below Havranek et al (2012)'s bias-corrected range of − 0.07 to −0.12 and below those reported by Al-Sahlawi (1988) for Saudi Arabia (− 0.08) and Bhattacharyya and Blake (2009) for Iran (−0.12), Libya (−0.08), and Qatar (− 0.09). As for the short-run income elasticity, it is somewhat consistent with Havranek and Kokes (2015)'s recent bias-adjusted estimate of 0.1.…”

“…This estimate falls at the lower bound of Havranek et al (2012)'s bias-corrected range of − 0.25 to − 0.38 and Burke and Nishitateno (2013)'s range of −0.2 and −0.5 (Table 2). On the other hand, long-run income elasticity is estimated at about 0.81, which far exceeds Havranek and Kokes (2015)'s bias-adjusted estimate of 0.23 but remains relatively close to the lower bound of Burke and Nishitateno (2013)'s range of 0.95 and 1.1. These long-run elasticities are also relatively consistent with the cross-country estimations of the long-run price elasticity (− 0.3) and income elasticities (0.9) in Table 6.…”

“…They estimate the bias-corrected short-run price elasticity within the range of − 0.07 to − 0.12 and long-run price elasticity within the range of − 0.25 to − 0.38. Another recent contribution by Havranek and Kokes (2015) uses Dahl (2012)'s data to estimate income elasticities that are also adjusted for publication selection bias. They estimate short-run income elasticities down from 0.28 to 0.1 and long-run income elasticities down from 0.66 to 0.23.…”

Measuring the Income Elasticity of Water Demand: The Importance of Publication and Endogeneity Biases

“…Havranek et al (2012) and Havranek & Kokes (2015) find publication bias in the literature estimating the price and income elasticities of gasoline demand, while report the same problem in the literature on the social cost of carbon.…”

Publication Bias in Measuring Anthropogenic Climate Change

“…This produces between-study heterogeneity. To cope with this problem, meta-analysts often apply the mixed-effects multilevel model (Havranek & Kokes 2015;Zigraiova & Havranek 2015), which allows for unobserved between-study heterogeneity. We use the model specified by Havranek & Irsova (2011) as follows:…”