Flexible But Parsimonious Demand Designs: The Case of Gasoline

Duke Economics Working Paper No. 00-07

27 Pages Posted: 11 Sep 2000

See all articles by Mark Coppejans

Mark Coppejans

BlackRock, Inc; Barclays Global Investors

Date Written: March 2000


In this paper, we consider expectations of the form E[log(y)|x] = a'log(x) as a good starting point for a more general analysis. We show why this naturally leads to the following flexible functional form E[y|x]= f(h(x)), where all functions are estimated by cubic splines. One of the main goals is to show that this estimator is straightforward to implement. We demonstrate the usefulness of the methods given in the paper by estimating gasoline demand from the 1994 RTECS data set, and in doing so, uncover interesting relationships of income and age on expected gasoline use.

Keywords: Gasoline Demand, Splines

JEL Classification: C51, D12, Q41

Suggested Citation

Coppejans, Mark T., Flexible But Parsimonious Demand Designs: The Case of Gasoline (March 2000). Duke Economics Working Paper No. 00-07, Available at SSRN: https://ssrn.com/abstract=236799 or http://dx.doi.org/10.2139/ssrn.236799

Mark T. Coppejans (Contact Author)

BlackRock, Inc ( email )

San Francisco, CA
United States

Barclays Global Investors ( email )

45 Fremont Street
San Francisco, CA 94105
United States

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