The demand for gasoline in China : a cointegration analysis
Document Type
Journal article
Source Publication
Journal of Applied Statistics
Publication Date
1-1-2004
Volume
31
Issue
5
First Page
533
Last Page
544
Keywords
Cointegration analysis, Gasoline consumption, Price and income elasticities
Abstract
The economic reforms in China since 1979 and consequent increases in disposable income have caused total gasoline consumption to soar nearly 240% between 1980 and 1999. As the growth rate of gasoline consumption is expected to be high due to the increased economic activity resulting from China's re-accession to the WTO, the government must understand the implications for economic growth and balance of payments. Using cointegration techniques, it was found that, between 1980 and 1999, demand for gasoline was relatively inelastic to price changes, both in the short and long terms. The long-run income elasticity was 0.97, implying that the future growth rate of gasoline consumption will be close to the growth rate of the economy, which is predicted to be about 7% per annum from 2001 to 2005, and 5-6% over the decade thereafter.
DOI
10.1080/02664760410001681837
Print ISSN
02664763
Publisher Statement
Copyright © 2004 Taylor & Francis Ltd. Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Cheung, K.-Y., & Thomson, E. (2004). The demand for gasoline in China: A cointegration analysis. Journal of Applied Statistics, 31(5), 533-544. doi: 10.1080/02664760410001681837