Publication at Faculty of Social Sciences |
2015
Abstract
In this paper we quantitatively synthesize empirical estimates of the income elasticity of gasoline demand reported in previous studies. The studies cover many countries and report a mean elasticity of 0.28 for the short run and 0.66 for the long run.
We show, however, that these mean estimates are biased upwards because of publication bias-the tendency to suppress negative and insignificant estimates of the elasticity. We employ mixed-effects multilevel meta-regression to filter out publication bias from the literature.
Our results suggest that the income elasticity of gasoline demand is on average much smaller than reported in previous surveys: the mean corrected for publication bias is 0.1 for the short run and 0.23 for the long run.