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Title: Are Gasoline Demand Elasticities Different across Cities?
Authors: Barla, Philippe
Herrmann, Markus
Ordas-Criado, Carlos
Miranda-Moreno, Luis F.
Keywords: Gasoline demand
Price and income elasticities
Random coefficient model
Peak car hypothesis
Issue Date: 2015-09
Series/Report no.: Cahiers du CREATE;2015-4
Abstract: In this paper, we examine the heterogeneity in gasoline demand price and income elasticities across 40 cities in the province of Quebec Canada using quarterly data over the 2004 to 2009 period. We reject the hypothesis of identical elasticities across markets. However, the range of values for the price elasticity, between -0.65 and -0.14, is relatively narrow and confirms that the demand for gasoline is price inelastic. We find evidence that the average price and income elasticity is somewhat larger in markets with public transportation. Furthermore, these markets experience a strong declining trend in gasoline use per capita.
Appears in Collections:Les cahiers du CREATE

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