Determinants of gasoline consumption in Argentina

Abstract

The objective of this article is to estimate a function that explains the gasoline demand behavior in our country, and that is useful for making short-term predictions. A precedent on this topic is a study carried out by Zuccotti (1980). This study covered the period 1970-1979, on a quarterly basis, and a price elasticity of -0.12% was estimated. In addition to the weighted price of gasoline, it uses the gross domestic product, the vehicle fleet, and the price of all other competitive goods as independent variables. In the present article, it was a priori assumed that structural changes in the regression coefficients were to be expected for long periods, as a result of the profound changes in relative prices during recent years. Here too, it was preferred to work with quarterly data, which would facilitate short-term estimates.

JEL classification: C20 ; L71 ; Q41