1. A global survey of gasoline and diesel price and income elasticities
- Author
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Gelo, Tomislav, Šušnjar, Ivan, Džakula, Miro, Načinović Braje, Ivana, Jaković, Božidar, and Pavić, Ivana
- Subjects
elasticity, price, income, diesel, gasoline, taxation - Abstract
This paper analyses price and income elasticity of demand as one of the main indicator of the market response to certain price or income changes. Price and income elasticity can be easily empirically established and directly used for planning various price and tax policies. Therefore, one of the most frequently investigated statistical correlation is the correlation between prices and income and consumption of petroleum products. For this reason, the demand for petroleum products is expressed as a multiplicative function between driving efficiency, mileage per car and car ownership. In a world where energy and energy supply is one of the fundamental obligations of a country, car demand has attracted great attention from scientific researchers. Theoretical overview of elasticities (price, income and cross-elasticity of demand for petroleum products) are analyzed in the first part with special accent to the difference between the short-run and long-run effects on the elasticity of demand. Fiscal policy and its influence on the elasticity of demand is also investigated in first part of the paper. Overview of global studies of price and income elasticity of demand for petroleum products are investigated in second part of the paper. The conclusion which is imposed from all the analyzed studies is that the elasticity of demand for petroleum products (price and income) has decreased from 1970.
- Published
- 2018