Elasticities of Gasoline Demand in Switzerland

Energy Policy, 36: 674-680, 2013

15 Pages Posted: 13 Jan 2012 Last revised: 16 Dec 2014

Andrea Baranzini

University of Applied Sciences Western Switzerland - Geneva School of Business Administration

Sylvain Weber

University of Neuchatel - Institute for Research in Economics (IRENE)

Date Written: 2013

Abstract

Using co-integration techniques, we investigate the determinants of gasoline demand in Switzerland over the period 1970-2008. We obtain a very weak price elasticity of -0.09 in the short run and -0.34 in the long run. For fuel demand, i.e. gasoline plus diesel, the corresponding price elasticities are -0.08 and -0.27. The rich dataset allows working with quarterly data and with more explicative variables than usual in this literature. In addition to the traditional price and income variables, we account for variables like vehicles stocks, fuel prices in neighbouring countries, oil shocks and fuel taxes. All of these additional variables are found to be significant determinants of demand.

Keywords: gasoline demand, price elasticity, income elasticity, cointegration, error correction model

JEL Classification: C32, Q41, R41

Suggested Citation

Baranzini, Andrea and Weber, Sylvain, Elasticities of Gasoline Demand in Switzerland (2013). Energy Policy, 36: 674-680, 2013. Available at SSRN: https://ssrn.com/abstract=1984584 or http://dx.doi.org/10.2139/ssrn.1984584

Andrea Baranzini

University of Applied Sciences Western Switzerland - Geneva School of Business Administration ( email )

CH-1227 Geneva
Switzerland
+41-22-388 1718 (Phone)
+41-22-388 1701 (Fax)

HOME PAGE: http://campus.hesge.ch/baranzia/

Sylvain Weber (Contact Author)

University of Neuchatel - Institute for Research in Economics (IRENE) ( email )

A.-L. Breguet 2
Neuchatel, 2000
Switzerland
+41327181442 (Phone)

HOME PAGE: http://www2.unine.ch/irene/lang/en/collaborateurs/sylvain_weber

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