The determinants of gasoline demand in some Latin American countries
by Jorge Rogat; Thomas Sterner
International Journal of Global Energy Issues (IJGEI), Vol. 11, No. 1/2/3/4, 1998

Abstract: This paper analyses the sensitivity of gasoline demand in a series of Latin American countries. Pricing policies and in particular transport fuel taxes are important instruments to come to grips with environmental threats, both at the local level of urban air pollution and for such international issues as global warming. In order to design policy instruments such as gasoline taxes, road pricing schemes or other measures, we need to know more about the determinants of gasoline demand elasticities. This paper provides some estimates of the price and income elasticities, in Latin America. It is an interesting issue in itself to see if these elasticities, which are a measure of economic flexibility, are different from their corresponding values in the OECD. The study estimates several traditional models using time series, crosssection and pooled methods, on the same data set, to analyse yearly gasoline consumption in the Latin American countries. One of the conclusions is that gasoline demand is quite sensitive to price, especially in the long run and that gasoline taxes should therefore be of considerable interest as a tool for environmental policy.

Online publication date: Thu, 27-Aug-2015

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