STRUCTURAL BREAKS IN GASOLINE AND DIESEL ELASTICITIES: A DYNAMIC ANALYSIS OF THE PORTUGUESE CASE

• Type: Article in International Conference Proceedings Book
• Date: 2019

Authors

S. Silva (Author) FEP; Soares, I (Author) FEP; Pinho, C (Author) Other

Conference proceedings International

Title: PROCEEDINGS OF THE 4TH INTERNATIONAL CONFERENCE ON ENERGY & ENVIRONMENT (ICEE 2019): BRINGING TOGETHER ENGINEERING AND ECONOMICS

Pages: 571-575

4th International Conference on Energy and Environment - Bringing together Engineering and Economics (ICEE)

Guimaraes, PORTUGAL, MAY 16-17, 2019

Indexing

ISI Web of Knowledge - 0 Citations

Other information

Authenticus ID: P-00R-E7K

Abstract (EN): Fuel consumption is strongly associated with pollution. Several policies have been implemented to fight this problem, among which fuel taxes are the most common. It is crucial to know if those taxes are effective to moderate demand. In this paper we calculate price and income elasticities of transport fuel demand for Portuguese consumers using a dynamic perspective. We cover the period from 1995 to 2015 and analyze the demand responses both for gasoline and diesel, as it corresponds to a critical macroeconomic period for this country. Results for the whole period show long-run price elasticities are -0.368 for diesel and -0.911 for gasoline while long-run income elasticities are 2.338 for diesel and 0.877 for gasoline. Notwithstanding, our tests indicate the existence of structural breakpoints for the demand of both fuels. Using rolling windows, we perform a dynamic analysis and conclude that there is a certain degree of variability of those elasticities around the values estimated with the full sample. It is evident that diesel consumption responses were affected by the economic crisis. Finally, our results show no evidence of an effect of the market liberalization.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 5