The Demand for Gasoline in China: A Cointegration Analysis

Abstract

The economic reforms in China since 1979 and consequent increases in disposable income have caused total gasoline consumption to soar nearly 240% between 1980 and 1999. As the growth rate of gasoline consumption is expected to be high due to the increased economic activity resulting from China's re-accession to the WTO, the government must understand the implications for economic growth and balance of payments. Using cointegration techniques, it was found that, between 1980 and 1999, demand for gasoline was relatively inelastic to price changes, both in the short and long terms. The long-run income elasticity was 0.97, implying that the future growth rate of gasoline consumption will be close to the growth rate of the economy, which is predicted to be about 7% per annum from 2001 to 2005, and 5-6% over the decade thereafter.Gasoline Consumption, Price And Income Elasticities, Cointegration Analysis,

Decoupling urban transport from GHG emissions in Indian cities—A critical review and perspectives

“…Therefore, implementing tax on gasoline or diesel should be assessed in conjunction with urban planning in the Indian context, it would be too late (as the case in the US) to impose tax once the cities have already been sprawled and large fraction of urban resident live far away from city centre and commute by private vehicles , only 5% of the commuters use public transit as their usual mode to work in the US ( DOT 2004) . Indeed, to make fiscal instruments effective, it is extremely important to have insight into households' consumption behaviour, the utmost indicators are income and price elasticities. Most studies show that shortand long-term gasoline demand is generally income elastic and price inelastic, in particular in developing economies (Garbacz, 1989;Dahl andSterner 1991, Eltony &Al-Mutairi, 1995;Ramanathan, 1999;Cheung and Thomson, 2004;Cao, 2009). More specifically, income elasticity in developing countries is found much higher than that in developed countries (McRae, 1994).…”

Mensuração das elasticidades-preço da demanda, cruzada e renda no mercado de etanol brasileiro: um estudo usando painéis cointegrados

“…Muitos dos estudos anteriores sobre a demanda por combustíveis usam apenas o preço do produto e uma proxy para renda, a exemplo dos estudos de Ramanathan (1999), Cheung e Thomson (2004) e Rodríguez (2006.…”

The Consumer’s Micro-Micro Gasoline Buying Decision

“…Although the larger problem of consumer demand for gasoline is well studied (gasoline demand being inelastic) Nicol (2003), Cheung and Thomson (2004), Ramanathan and Subramanian (2003), and Espey (1998), it seems that the micromicro problem using daily prices in this paper has not been considered in the literature.…”