Gasoline Demand Elasticities at the Backdrop of Lower Oil Prices: Fuel-Subsidizing Country Case

This study investigates the income and price elasticities of gasoline demand for a fuel subsidizing country case, applying three different time-varying coefficient approaches to the data spanning the period from January 2002 to June 2018. The empirical estimations concluded a cointegration relationship between gasoline demand, income, and gasoline price. The income elasticity found ranges from 0.10 to 0.29, while the price elasticity remains constant over time, being −0.15. Income elasticity increases over time, slightly decreasing close to the end of the period, which is specific for a developing country. In the short run, gasoline demand does not respond to the changes in income and price. The policy implications are discussed based on the findings of the study. Research results show that since the income elasticity of demand is not constant, the use of constant elasticities obtained in previous studies might be misleading for policymaking purposes. An increase in income elasticity might be the cause of the inefficiency of the existing vehicles. The small price elasticity allows to say that if policy makers plan to reduce gasoline consumption then increasing its price would not substantially reduce the consumption. The current situation can be utilized to increase energy efficiency and implement eco-friendly technologies. For this purpose, the quality of existing transport modes can be improved. Meanwhile, to meet households’ needs, policies such as providing soft auto loans need to be formed to balance the recent drop in car sales.

Download Full-text

Econometric Analysis of Residential Sector Gas Demand Elasticities in Gas Exporting Countries

Energy and Environment Research ◽

10.5539/eer.v11n2p1 ◽

2021 ◽

Vol 11 (2) ◽

pp. 1

Author(s):

Eshagh Mansourkiaee ◽

Hussein Moghaddam

Keyword(s):

Price Elasticity ◽

Income Elasticity ◽

Bounds Testing ◽

Short Term ◽

Residential Sector ◽

Price And Income Elasticities ◽

Long Run ◽

Short Run ◽

Income And Price Elasticities ◽

Price Policies

This paper examines how residential sector gas demand in gas exporting countries response to changes by taking into consideration the economic variables. For this purpose, the short and long-run price and income elasticities of residential sector gas demand in the GECF countries for 2000 and 2019 are measured. Using Cobb-Douglas functional form, this paper applies the bounds testing approach to co-integrate within the framework of ARDL (Autoregressive Distributed Lag). Findings of this research show that there is a significant long-run relationship in nine GECF countries, including Algeria, Egypt, Iran, Malaysia, Norway, Peru, Russia, Trinidad and Tobago and Venezuela, that use gas as a source of energy in their residential sector. On average, long-rung income elasticity for underlying countries is 2.65, while long-run price elasticity is negative and calculated at 0.79. This shows that in considered gas exporting countries, residential sector gas demand is very sensitive to income policies, while the price policies impact on demand is more limited. Furthermore, short-run income and price elasticities are estimated at 6.99 and -0.02 (near zero) respectively, which implies that natural gas is very inelastic to price, as a result,price policies are unable to make significant changes in demand over the short-term. Meanwhile, as expected short-run price elasticity is lower than long-run elasticities, indicating that gas exporting countries are more responsive to price in the long-term than in the short-term. Finally, it was found that most of the preferred models have empirical constancy over the sample period. 

Download Full-text

Residential Demand for Electricity and Natural Gas in Pakistan

The Pakistan Development Review ◽

10.30541/v22i1pp.23-36 ◽

1983 ◽

Vol 22 (1) ◽

pp. 23-36 ◽

Cited By ~ 8

Author(s):

Mahmood Iqbal

Keyword(s):

Economic Theory ◽

Natural Gas ◽

Price Elasticity ◽

Income Elasticity ◽

A Priori ◽

Policy Implications ◽

A Priori Knowledge ◽

Price Elasticities ◽

Residential Demand ◽

Income And Price Elasticities

A model for residential demand for fuel in Pakistan was developed on the basis of stock of fuel-consuming appliances and their rate of utilization. Income and price elasticities of natural gas and electricity are estimated by the OLS and GLS methods. The income elasticity of natural gas and electricity and price elasticity of natural gas are found statistically significant and consistent with a priori knowledge of economic theory. Several policy implications are pointed out and suggestions are made for improvement in future estimations.

Download Full-text

Estimating the Short-Run Income Elasticity of Demand for Electricity by Using Cross-Sectional Categorized Data

Journal of the American Statistical Association ◽

10.1080/01621459.1985.10478107 ◽

1985 ◽

Vol 80 (390) ◽

pp. 259-265 ◽

Cited By ~ 18

Author(s):

Cheng Hsiao ◽

Dean Mountain

Keyword(s):

Income Elasticity ◽

Cross Sectional ◽

Elasticity Of Demand ◽

Short Run ◽

Income Elasticity Of Demand

Download Full-text

The force of globalization reshaping the local institutions: evidence from the Organization of Islamic Cooperation member countries

International Journal of Emerging Markets ◽

10.1108/ijoem-10-2019-0794 ◽

2020 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Nahla Samargandi ◽

Kazi Sohag ◽

Ali Kutan ◽

Maha Alandejani

Keyword(s):

Government Expenditure ◽

Policy Implications ◽

Institutional Setting ◽

Cross Sectional ◽

Policy Makers ◽

Content Type ◽

Long Run ◽

Short Run ◽

Nonlinear Relation ◽

Political Globalization

PurposeThe authors reinforce the existing literature on the effect of overall globalization on institutional quality (IQ), while incorporating the effects of economic, political and social aspects of globalization, human capital, government expenditure and population growth. To this end, the authors estimate panel data models for a sample of 36 member countries of the Organization of Islamic Cooperation (OIC) during 1984–2016.Design/methodology/approachThe authors employ the cross-sectional autoregressive distributed lags (CS-ARDL) approach.FindingsThe study’s investigation affirms the presence of an inverted U-shaped (nonlinear) relation between overall globalization and IQ indexes for the sample countries, which suggests no additional room for improvement in IQ. It also underpins the existence of an inverted-U-shaped (nonlinear) relation between political globalization and IQ. In contrast, economic and social globalizations have a U-shaped relation with IQ, implying more scope for improvement.Research limitations/implicationsThe findings have key policy implications. First, policy makers should consider a long-run approach for improving IQ and globalization over time. Second, quick reforms in the short run may not improve IQ.Practical implicationsThe results suggest that policy makers should approach the globalization process from a long-run perspective as well by designing appropriate strategies to provide a continuous but gradual increase in globalization so as to systematically monitor the threshold limits to IQ from improving globalizationOriginality/valueTo the best of the authors’ knowledge, this work is the first to empirically investigate the overall role of globalization in promoting IQ under the conditions of short-run heterogeneity and long-run homogeneity. The authors focus on the member countries of the OIC, many of which are ruled by authoritarian regimes and suffer from a poor domestic institutional setting.

Download Full-text

Short Run Income Elasticity of Demand for Residential Electricity Using Consumer Expenditure Survey Data

The Energy Journal ◽

10.5547/issn0195-6574-ej-vol14-no4-7 ◽

1993 ◽

Vol 14 (4) ◽

Cited By ~ 6

Author(s):

E. Raphael Branch

Keyword(s):

Survey Data ◽

Income Elasticity ◽

Consumer Expenditure ◽

Elasticity Of Demand ◽

Consumer Expenditure Survey ◽

Expenditure Survey ◽

Residential Electricity ◽

Short Run ◽

Income Elasticity Of Demand

Download Full-text

Investigating the Effects of Government Expenditure and Money Supply on Unemployment in Namibia

Journal of Economics and Behavioral Studies ◽

10.22610/jebs.v12i4(j).3004 ◽

2020 ◽

Vol 12 (4(J)) ◽

pp. 73-83

Author(s):

Wilhelmine Naapopye Shigwedha ◽

Teresia Kaulihowa

Keyword(s):

Money Supply ◽

Government Expenditure ◽

Policy Implications ◽

Employment Creation ◽

Monetary Policies ◽

Policy Makers ◽

Policy Interventions ◽

Short Run ◽

Effective Policy ◽

Unemployment Problem

This paper examines how government expenditure and money supply affect unemployment in Namibia. It employs the ARDL and ECM estimation techniques to establish the underlying relationship for the period 1980-2018. The results support the hypothesis that government expenditure and money supply can be used to contain unemployment. Additionally, an evidence of both long and short-run causality from government expenditure and money supply to unemployment is found. Practical policy implications indicate that in order to effectively combat unemployment problem in Namibia, the study recommends that there is a need for policy makers to ensure that the goal of employment creation is mainstreamed in all relevant fiscal and monetary policies responses in the country. Moreover, there is also a need to identify and propose policies that can help to do away with the lack of effective policy interventions

Download Full-text

TOURISM DEMAND MODELING: PRICE AND INCOME ELASTICITY

Journal of Indonesian Tourism Hospitality and Recreation ◽

10.17509/jithor.v1i1.13748 ◽

2018 ◽

Vol 1 (1) ◽

Author(s):

A.H.G Kusumah

Keyword(s):

European Union ◽

Price Elasticity ◽

Income Elasticity ◽

Tourism Demand ◽

Demand Model ◽

Demand Modeling ◽

Elasticity Of Demand ◽

Price Elasticity Of Demand ◽

Income Elasticity Of Demand

This paper provides a tourism demand model that estimates the price elasticity of demand and income elasticity of demand in Australia, European Union (EU), and USA. The results show that Australia and EU tourists markets are price elastic, while USA market is slightly price inelastic. It indicates that both Australia and EU tourists markets are sensitive to the tourism price while USA market is not. The study also found that the income elasticity of demand from the three markets is relatively income inelastic. In other words, tourism demand in the three markets is unresponsive to a change in income.Keywords: Tourism Demand, Price ElasticityThis paper provides a tourism demand model that estimates the price elasticity of demand and income elasticity of demand in Australia, European Union (EU), and USA. The results show that Australia and EU tourists markets are price elastic, while USA market is slightly price inelastic. It indicates that both Australia and EU tourists markets are sensitive to the tourism price while USA market is not. The study also found that the income elasticity of demand from the three markets is relatively income inelastic. In other words, tourism demand in the three markets is unresponsive to a change in income.

Download Full-text

The Turkish Biotechnology System

Comparative Approaches to Biotechnology Development and Use in Developed and Emerging Nations - Advances in Bioinformatics and Biomedical Engineering ◽

10.4018/978-1-5225-1040-6.ch009 ◽

2017 ◽

pp. 251-268

Author(s):

Dilek Cetindamar

Keyword(s):

Developing Countries ◽

Innovation Policy ◽

Innovation System ◽

Innovation Systems ◽

Policy Implications ◽

Policy Makers ◽

Policy Issues ◽

Innovation Processes ◽

Shed Light ◽

Over Time

This chapter empirically examines biotechnology innovation system in order to present the concerns of developing countries. Even though it is not possible to create standard prescriptions across countries, this paper aims to develop a solid understanding of how biotechnology and institutions co-evolve that might shed light to innovation policy issues for biotechnology across developing countries. The immediate goal is the Turkish policy makers but it will surely have policy implications for developing countries in general. Through mapping innovation processes/functions over time, it is possible to develop insights of the dynamics of innovation systems. This mapping is carried out for the Turkish biotechnology system, and the findings are summarized.

Download Full-text