An estimation of U.S. gasoline demand: A smooth time-varying cointegration approach
In this paper the U.S. gasoline demand from 1976 to 2008 is estimated using a time-varying cointegrating regression. We find that price elasticity increased rapidly during the late 1970s and then decreased until 1987. After a relatively small-scaled "increase-decrease" cycle from 1987 to 2000, the price elasticity rose again after 2000. The time-varying change of the elasticities may be explained by the proportion of gasoline consumption to income and fluctuation of the degree of necessity. The...[Show more]
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