Do Gasoline Demand Elasticities Vary?

This paper answers questions concerning gasoline-demand elasticity by analyzing periods that span both increasing and decreasing prices, focusing on consumer decisions about the distance driven and the automobile size. US data show that efficiency changes and reduced mileages account equally for short-run elasticities, while automobile efficiency accounts for 90% in the long run. The analysis shows a consistency that makes it useful in projecting elasticities during market disruptions and over a broad span of economic conditions in other countries. 38 references. (DCK)