The systemic, long-run relation among gasoline demand, gasoline price, income, and vehicle ownership in OECD countries: Evidence from panel cointegration and causality modeling

This paper looks at relationships between gasoline consumption per capita, income, gasoline price, and car ownership for a panel of OECD countries. Estimated long-run and short-run income elasticities are smaller than typically found and gasoline consumption is Granger-caused by gasoline price, but not by car ownership or income. Car ownership is Granger-caused by income and at the margin by gasoline consumption, but not by gasoline price.

► Considers gas consumption, car ownership, income, and price for 14 OECD countries.
► Variables are panel I(1) and cointegrated.
► Estimated long- and short-run elasticities are smaller than most previous ones.
► Estimates agree with literature arguing that gasoline price is now more inelastic.