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Nonparametric Estimation of Household Gasoline Demand in Japan

Research Project

Project/Area Number 15530166
Research Category

Grant-in-Aid for Scientific Research (C)

Allocation TypeSingle-year Grants
Section一般
Research Field Applied economics
Research InstitutionSeikei University

Principal Investigator

INOUE Tomoo  Seikei University, Faculty of Economics, Preofesor, 経済学部, 教授 (70307114)

Co-Investigator(Kenkyū-buntansha) SHIMOJI Makoto  Yokohama National University, Inaternational Graduate School of Social Sciences, Associate Professor, 国際社会科学研究科, 助教授 (00323923)
UESUGI Iichiro  Research Institute of Economy, Trade and Industry, Fellow, 研究員 (40371182)
HIRAO Yukiko  Seikei University, Faculty of Economics, Professor, 経済学部, 教授 (40276647)
Project Period (FY) 2003 – 2004
Project Status Completed (Fiscal Year 2004)
Budget Amount *help
¥1,100,000 (Direct Cost: ¥1,100,000)
Fiscal Year 2004: ¥500,000 (Direct Cost: ¥500,000)
Fiscal Year 2003: ¥600,000 (Direct Cost: ¥600,000)
Keywordsnonparametric analysis / panel data / gasoline demand / CO2 / Family Income and Expenditure Survey / elasticity
Research Abstract

We estimate the gasoline demand in Japan by using the Family Income and Expenditure Survey conducted by the Ministry of Internal Affairs and Communications. We compare the estimated price and income elasticities with the ones in the previous studies including Hausman and Newey (1995), Schmalensee and Stoker (1999), and Yatchew and No (2001). Compared with these studies, our data set has two major advantages, i.e., (1) the long sample periods of more than 20 years, and (2) availability of the actual income values rather than income classes. These enable us to add further insights on the gasoline demand behavior not examined in the literature.
One of the insights is on the intertemporal aspect of gasoline purchase. In contrast to other non-durables, gasoline is likely to be stored in a sizable amount as inventories. As pointed out by Hendel and Nevo (2002), omitting the stock-aspect variables necessarily biases the estimates of price elasticities. Our stock variables are significant in the estimation, which implies that the elasticities in the previous literature without inventory variables are possibly biased.
Considering the stock effects is important especially in the gasoline market where the price variations reflect the strategic relationship between consumers and gasoline stations (Noel (2003), Inoue and Shimoji (2005)). Our results demonstrate the importance of dynamic purchase behavior, which cannot be captured in the static supply-demand analysis.
Several environmental policy implications are also presented in the paper.

Report

(3 results)
  • 2004 Annual Research Report   Final Research Report Summary
  • 2003 Annual Research Report

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Published: 2003-04-01   Modified: 2016-04-21  

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