High Frequency Evidence on the Demand for Gasoline
| Autor: | Laurence Levin, Frank A. Wolak, Matthew S. Lewis |
|---|---|
| Rok vydání: | 2017 |
| Předmět: |
Price elasticity of demand
020209 energy 05 social sciences 02 engineering and technology Metropolitan area Microeconomics Econometric model 0502 economics and business 0202 electrical engineering electronic engineering information engineering Spatial aggregation Range (statistics) Econometrics Economics 050207 economics Gasoline Robustness (economics) Baseline (configuration management) General Economics Econometrics and Finance |
| Zdroj: | American Economic Journal: Economic Policy. 9:314-347 |
| ISSN: | 1945-774X 1945-7731 |
| DOI: | 10.1257/pol.20140093 |
| Popis: | This paper uses daily expenditure data and prices from February 1, 2006 to December 31, 2009 for 243 United States cities to estimate the price responsiveness of the daily demand for gasoline to changes in daily gasoline prices. Across a wide range of econometric model specifications, we obtain price elasticity estimates ranging from 0.29 to 0.61 or roughly an order of magnitude larger than estimates from recent studies using data that is more aggregated over both time and locations. We investigate the divergence between these results and find that a virtually all of the difference can be explained by the higher level of temporal and spatial aggregation. Since our baseline estimates rely on a traditional demand estimation approach that does not properly account for the distinction between expenditures on gasoline and demand for gasoline, we also specify a frequency of purchase model that recovers the demand for gasoline from expenditures and the number of purchases. In addition to confirming the robustness of our demand elasticity estimates we find evidence that consumers are substantially less (more) likely to purchase gasoline in the days immediately following a price increase (decrease). Finally, we allow for differences in price elasticities across metropolitan areas and show that they appear to be associated with various demographic characteristics as well as the availability of viable alternative modes of transportation in the region. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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