Econometric Society 57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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HOUSEHOLD GASOLINE DEMAND IN THE U.S.: AN ESTIMATION OF A MULTIPLE-DISCRETE/CONTINUOUS CHOICE MODEL


Category: Econometrics
DEMAND ANALYSIS
Tuesday 27th August 2002, 09:30 - 11:00, Room: 5.1
Session Chair(s): Soren Leth-Petersen, AKF, Institute of Local Government Studies, DENMARK

Presenter(s): Aydemir, Zava

Co-Author(s): none

Keyword(s): Gasoline Demand, Multiple-Discrete/Continuous Choice Model, Nested Logit, Product Differentiation

JEL(s): C51, D11, Q41

Abstract:

This paper presents a multiple-discrete/continuous choice model. In this model consumers maximize utility by choosing the number and types of vehicles, several different fuel types and the quantity of gasoline. We estimate the model using household-level data. Compared to the traditional literature that uses aggregate data our estimates on own price elasticities are substantially lower and insignificant. Whereas time-series studies report elasticities of around -0.24 the corresponding figures in our study range between -0.17 and 0.16. Price variations virtually play no role when taking the multiple-discrete feature of gasoline demand into account.


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Paper Reference Number: 1383

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57th European Meeting
25th August 2002 - 28th August 2002, Venice, Italy

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