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Journal of Tsinghua University(Science and Technology)    2018, Vol. 58 Issue (5) : 489-493     DOI: 10.16511/j.cnki.qhdxxb.2018.22.026
Estimating the elasticities of gasoline demand for urban households in China
CAO Jing1,2, HU Wenhao1
1. Department of Economics, School of Economics and Management, Tsinghua University, Beijing 100084, China;
2. Hang Lung Center for Real Estate, Tsinghua University, Beijing 100084, China
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Abstract  To encourage low-carbon lifestyles and reduce vehicle air pollution, the Chinese government needs to implement effective policy tools to regulate gasoline consumption, such as gasoline taxes. This paper uses the Probit and Translog models to estimate gasoline price and income elasticities using urban household consumption data for 1992-2009. The results show that the household characteristics significant impact the gasoline consumption of urban households in China. The micro-data elasticities results are similar to those in western countries. The gasoline demand price elasticity is-0.445 and the sophisticated income elasticity is 1.307. Thus, a fuel tax can effectively regulate driving behavior as well as gasoline consumption. In addition, these results show that a gasoline tax is also progressive in China that reduces gasoline consumption and pollutant emissions without negative effects on household welfare.
Keywords gasoline demand      price elasticity      income elasticity      Probit model      Translog model     
ZTFLH:  F416.22  
Issue Date: 15 May 2018
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CAO Jing
HU Wenhao
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CAO Jing,HU Wenhao. Estimating the elasticities of gasoline demand for urban households in China[J]. Journal of Tsinghua University(Science and Technology), 2018, 58(5): 489-493.
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