Demand for Gasoline Is More Price-Inelastic than Commonly Thought
| Author(s): | prof. PhDr. Tomáš Havránek Ph.D., doc. PhDr. Zuzana Havránková Ph.D., prof. Ing. Karel Janda M.A., Dr., Ph.D., |
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| Type: | IES Working Papers |
| Year: | 2011 |
| Number: | 10 |
| ISSN / ISBN: | |
| Published in: | IES Working Papers 10/2011 |
| Publishing place: | Prague |
| Keywords: | Gasoline demand; Price elasticity; Meta-analysis; Publication selection bias |
| JEL codes: | C83; Q41; Q48 |
| Suggested Citation: | Havránek, T., Iršová, Z., Janda, K. (2011). “Demand for Gasoline Is More Price-Inelastic than Commonly Thought” IES Working Paper 10/2011. IES FSV. Charles University. |
| Grants: | GACR P402/11/0948 Developing Analytical Framework for Energy Security: Time-Series Econometrics, Game Theory, Meta-Analysis and Theory of Regulation GAUK 76810 Development and Application of Meta-Analytic Methods in Economics |
| Abstract: | One of the most frequently examined statistical relationships in energy economics has been the price elasticity of gasoline demand. We conduct a quantitative survey of the estimates of elasticity reported for various countries around the world. Our meta-analysis indicates that the literature suffers from publication selection bias: insignificant and positive estimates of the price elasticity are rarely reported, although implausibly large negative estimates are reported regularly. In consequence, the average published estimates of both short- and long-run elasticities are exaggerated twofold. Using mixed-effects multilevel meta-regression, we show that after correction for publication bias the average long-run elasticity reaches -0.31 and the average short-run elasticity only -0.09 |
| Downloadable: |
WP 2011_10_Havranek, Irsova, Janda |
