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Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand
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Understanding the sensitivity of gasoline demand to changes in prices and income has important implications for policies related to climate change, optimal taxation and national security. The short-run price and income elasticities of gasoline demand in the United States during the 1970s and 1980s have been studied extensively. However, transportation analysts have hypothesized that behavioral and structural factors over the past several decades have changed the responsiveness of U.S. consumers to changes in gasoline prices. We compare the price and income elasticities of gasoline demand in two periods of similarly high prices from 1975 to 1980 and 2001 to 2006. The short-run price elasticities differ considerably: and range from -0.034 to -0.077 during 2001 to 2006, versus -0.21 to -0.34 for 1975 to 1980. The estimated short-run income elasticities range from 0.21 to 0.75 and when estimated with the same models are not significantly different between the two periods.
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“Gasoline consumption is responsive to price changes,195–197”
From Population Approaches to Improve Diet, Physical Activity, and Smoking Habits: A Scientific Statement From the American Heart Association (2012) · cites this paper as [196]
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Turner, M., Mehrotra, N., & Uribe, J. P. (2023) · National Bureau of Economic Research · doi:10.3386/w30989 · Cited by 13
Metadata
- Authors
- Hughes, J. E., Knittel, C. R., & Sperling, D.
- Affiliations
- University of Colorado Boulder (US)
- National Bureau of Economic Research (US)
- * Institute of Transportation Studies, University of California, Davis, One Shields Avenue, Davis, CA 95616. Email: jehughes@ucdavis.edu.
- Corresponding author
- Hughes, Jonathan E.
- Venue
- The Energy Journal
- Publisher
- SAGE Publications
- Published
- 2008-01
- Volume
- 29
- Issue
- 1
- Pages
- 113-134
- ISSN
- 0195-6574 (ISSN-L)
- 1944-9089
- OpenAlex
- W3023760385
- Cited by
- 668
- References
- 23
- Citations by year
- 2026: 13 · 2025: 13 · 2024: 17 · 2023: 21 · 2022: 19 · 2021: 32 · 2020: 27 · 2019: 22 · 2018: 34 · 2017: 29 · 2016: 48 · 2015: 45 · 2014: 43 · 2013: 53 · 2012: 57
- FWCI
- 23.76
- Type
- journal article
- Language
- en
- Open access
- green
- doi.org
- Locations
- The Energy Journal (publishedVersion)
- SSRN Electronic Journal (publishedVersion)
- National Bureau of Economic Research (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- eScholarship (California Digital Library) (submittedVersion)
- National Bureau of Economic Research (submittedVersion)
- Econstor (Econstor) (submittedVersion)
- Topics
- Physical Sciences › Energy › Renewable Energy, Sustainability and the Environment › Energy, Environment, and Transportation Policies
- Social Sciences › Transportation › Transportation Planning and Optimization
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economics of Agriculture and Food Markets
- Keywords
- gasoline consumption, price elasticity, income elasticity, temporal comparison, United States
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