Short-run price and income elasticity of gasoline demand: Evidence from Lebanon

Sita, Bernard Ben; Marrouch, Walid; Abosedra, Salah

doi:10.1016/j.enpol.2012.03.041

Cited by 28 publications

(4 citation statements)

References 20 publications

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“…Despite the variations in the quantified results, some consensus has been achieved: 1) Both income elasticities and price elasticities have larger long-term elasticity coefficients than short-term elasticity coefficients, implying that oil (product) demand is more responsive to changes in income and prices in the long term (Cooper, 2003a;Sita et al, 2012). 2) Oil demand is more sensitive to changes in income than to price variations (Liddle and Huntington, 2020b).…”

Section: Elasticity Estimates Of Oil Demandmentioning

confidence: 99%

Crude oil footprint in the rapidly changing world and implications from their income and price elasticities

Zheng

Wang²,

Liddle³

et al. 2022

Energy Policy

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Section: Elasticity Estimates Of Oil Demandmentioning

confidence: 99%

Crude oil footprint in the rapidly changing world and implications from their income and price elasticities

Zheng

Wang²,

Liddle³

et al. 2022

Energy Policy

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“…An example is the data for the petroleum product market of Lebanon, a country that has experienced many dramatic political events in its recent history. The petroleum product market has undergone several upheavals, accompanied by sharp changes in the values of the elasticity model, involving, in turn, sharp changes in the elasticity (Sita et al, 2012). By its form, it is an econometric model that does not describe the internal market mecha-nism of the jump in the elasticity, but shows those possible changes of values of elasticity.…”

Section: Literature Reviewmentioning

confidence: 99%

Estimation of the price elasticity of petroleum products? consumption in Ukraine

Galchynskyi

2020

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Research background: The analysts of the petroleum product markets of industrial countries believe that the elasticity of demand varies at different periods, which gave rise to the hypothesis that behavioral and structural factors have changed the consumers’ reaction during the last few decades, with a change in prices of petroleum products. Purpose of the article: The purpose of this article is to study the elasticity of demand and prices in order to identify changes in consumer behavior in the oil market after significant socio-economic shocks and to establish a correlation between changes in elasticity and price volatility, with the Ukrainian petroleum products market as an illustrative example. Methods: Based on the time series of the petroleum product market of Ukraine, static and dynamic models for assessing the demand elasticity were constructed. It was found that the time series of demand for petroleum products is non-stationary but then the time series of the first differences is stationary according to the extended Dickey-Fuller test; further, the fact of co-integration between time series of consumption, income, and prices was established by the Johansson test. This made it possible to construct co-integration dependence, allowing, in turn, the development of models for assessing the elasticity of demand for petroleum products, on the basis of which objective assessments of changes in consumer behavior were established. Analysis of the monthly calculation of petroleum products’ price volatility during the period 2008 to 2018 has showed that the values of volatility increased abnormally in the period between the beginning of 2014 and the middle of 2015. The estimates of price and demand elasticities obtained for the two periods up to the beginning of 2014 and the second half of 2015 differ significantly from the values of the corresponding elasticities between the beginning of 2014 and the middle of 2015. Findings & Value added: Assessments of income elasticities and price elasticities for petroleum products in the Ukrainian market were obtained by three co-integration models, both short and long term, for each of the three previously defined time intervals. In one of them, characterized by a high level of price volatility conditionally referred to as a crisis, the value of elasticities differed markedly from the corresponding values in the other two periods, in particular, -0.383 for price elasticity and 1.068 for a long-term bond. In the other two periods, these were, respectively, 0.543 for price elasticity and 0.274 for long-term pre-crisis elasticity, and -0.470 for price elasticity and 0.235 for long-term post-crisis elasticity. Appropriate elasticity estimates were obtained for both the short-run and the dynamic model, for the same defined intervals. A comparison of these estimates showed the closeness of the values of elasticities for the pre-crisis and post-crisis intervals and a marked difference from the estimates of the elasticities in the crisis interval. Thus, it was found that a significant change in elasticities is accompanied by an increase in price volatility.

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“…A lot of publications examine the characteristics of the demand side, such as elasticity of demand (Dahl 2012, Brons et al 2008, using various methods and looking at various countries, e.g. North America (Lau et al 2012, Park and Zhao 2010, Nicol 2003, South America (Hofstetter and Tovar 2008), China (Lin and Zeng 2013), the Middle East (Ben Sita et al 2012), or Europe (Pock 2010). Overall, the common denominator is that demand for gasoline is inelastic (Haucap and Mueller 2012).…”

Section: Introductionmentioning

confidence: 99%

“…In their model setup, they find that demand seems slightly more elastic with respect to gasoline demand for transportation than other purposes. With respect to income elasticity of gasoline demand, Ben Sita, Marrouch and Abosedra (2012) analyze Lebanon data. They find that both government revenues and environmental standards do not benefit from a flat excise tax.…”

Section: Introductionmentioning

confidence: 99%

Regulating Gasoline Retail Markets: The Case of Germany

Wittmann

2014

Economics

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In 2011, price peaks in retail gasoline prices caused public outrage and attracted the attention of German regulatory agencies. After having examined the market, competition authorities concluded that tacit collusion existed but could not easily be prosecuted under given competition law. In several other countries, various types of regulatory schemes are implemented to tackle tacit collusive behavior, e.g., there are price ceilings established in Luxembourg or per day limits of price increases given in Austria. However, research has found that none of them has led to satisfactory results. Hence, the following paper proposes a different regulatory approach, i.e., the implementation of corrective taxes. Results show that a specially tailored tax on price successfully manages to render collusion an unprofitable business by collecting marginal profits and that the inherent vice of the gasoline retail market, i.e., the transparency that enables tacit-and therefore non-prosecutable-collusion, could be turned into a regulatory virtue as it becomes a powerful means to help successfully tackle imperfect competition and to bring about a more efficient market outcome. JEL Q48 D42 D43

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Short-run price and income elasticity of gasoline demand: Evidence from Lebanon

Cited by 28 publications

References 20 publications

Crude oil footprint in the rapidly changing world and implications from their income and price elasticities

Crude oil footprint in the rapidly changing world and implications from their income and price elasticities

Estimation of the price elasticity of petroleum products? consumption in Ukraine

Regulating Gasoline Retail Markets: The Case of Germany

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