An empirical analysis of gasoline demand in Denmark using cointegration techniques

Bentzen, Jan

doi:10.1016/0140-9883(94)90008-6

Cited by 82 publications

(45 citation statements)

References 6 publications

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“…Another application that uses iso-elastic demands relates to commodity pricing (see, e.g., Deaton and Laroque (1992)). Finally, practitioners and researchers have used iso-elastic demand models for products in retail such as groceries, fashion (see, e.g., Pindyck and Rubinfeld (2001), Capps (1989) and Andreyeva et al (2010)) and gasoline (e.g., Bentzen (1994)). …”

Section: Multiplicative Noisementioning

confidence: 99%

The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption

2014

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This paper studies government subsidies for green technology adoption while considering the manufacturing industry's response. Government subsidies offered directly to consumers impact the supplier's production and pricing decisions. Our analysis expands the current understanding of the price-setting newsvendor model, incorporating the external influence from the government who is now an additional player in the system. We quantify how demand uncertainty impacts the various players (government, industry and consumers) when designing policies. We further show that for convex demand functions, an increase in demand uncertainty leads to higher production quantities and lower prices, resulting in lower profits for the supplier. With this in mind, one could expect consumer surplus to increase with uncertainty. In fact, we show this is not always the case and the uncertainty impact on consumer surplus depends on the trade-off between lower prices and the possibility of under-serving customers with high valuations. We also show that when policy makers such as governments ignore demand uncertainty when designing consumer subsidies, they can significantly miss the desired adoption target level. From a coordination perspective, we demonstrate that the decentralized decisions are also optimal for a central planner managing jointly the supplier and the government. As a result, subsidies provide a coordination mechanism.

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Section: Multiplicative Noisementioning

confidence: 99%

The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption

2014

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“…Given the trended nature of the data (see Figures 2, 3 and 4) and the tendency for long run transport use (or energy related to transport), GDP and travel costs to be cointegrated (Bentzen 1994, Fouquet 1997, Ramanathan 1999, the possibility of using vector error-correcting models (VECM) was explored. From a statistical perspective, such models were appropriate.…”

Section: Income and Price Elasticities And Rebound Effectsmentioning

confidence: 99%

Trends in income and price elasticities of transport demand (1850–2010)

Fouquet

2012

Energy Policy

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“…• The magnitudes of the short-and long-run income and price elasticities of gasoline demand differ by country or region (Pock, 2007;Bentzen, 1994;Sterner, Dahl and Franzén, 1992). Long-run income elasticity is lower (0.55) for the oecd countries, excluding Chile and Mexico, than for Latin America (0.69), while long-run price elasticities are higher in absolute terms in the oecd countries (-0.41), excluding Chile and Mexico, than in Latin America (-0.31) (see table 12).…”

Section: Meta-analysis Of the Income And Price Elasticities Of Gasolimentioning

confidence: 99%

“…In principle, the following factors can be considered: (i) The magnitudes of the income and price elasticities of gasoline demand differ by country or region (Pock, 2007;Bentzen, 1994;Sterner, Dahl and Franzén, 1992). Accordingly, the income elasticity of gasoline demand is expected to be higher in middle-income countries than in developed ones and the price elasticity lower in developing countries than in developed ones (Brons and others, 2008;Havranek and others, 2012).…”

Section: Meta-analysis Of the Income And Price Elasticities Of Gasolimentioning

confidence: 99%

Meta-analysis of the income and price elasticities of gasoline demand: public policy implications for Latin America

Galindo¹,

Samaniego²,

Alatorre³

et al. 2016

CEPAL Review

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SUMMARYBy means of a meta-analysis, this article sets out to estimate average values for the income and price elasticities of gasoline demand and to analyse the reasons for the variations in the elasticities reported by the literature. The findings show that there is publication bias, that the volatility of elasticity estimates is not due to sampling errors alone, and that there are systematic factors explaining these differences. The income and price elasticities of gasoline demand differ between the short and long run and by region, and the estimation can appropriately include the vehicle fleet and the prices of substitute goods, the data types and the estimation methods used. The presence of a low price elasticity suggests that a fuel tax will be inadequate to control rising consumption in a context of rapid economic growth.

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An empirical analysis of gasoline demand in Denmark using cointegration techniques

Cited by 82 publications

References 6 publications

The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption

The Impact of Demand Uncertainty on Consumer Subsidies for Green Technology Adoption

Trends in income and price elasticities of transport demand (1850–2010)

Meta-analysis of the income and price elasticities of gasoline demand: public policy implications for Latin America

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