The demand for gasoline in China : a cointegration analysis

Kui Yin CHEUNG, Elspeth THOMSON

Research output: Journal PublicationsJournal Article (refereed)

24 Citations (Scopus)

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.
Original languageEnglish
Pages (from-to)533-544
Number of pages12
JournalJournal of Applied Statistics
Volume31
Issue number5
DOIs
Publication statusPublished - 1 Jan 2004

Fingerprint

Cointegration
China
Economics
Economic Growth
Long-run
Elasticity
Term
Demand
Cointegration analysis

Keywords

  • Cointegration analysis
  • Gasoline consumption
  • Price and income elasticities

Cite this

CHEUNG, Kui Yin ; THOMSON, Elspeth. / The demand for gasoline in China : a cointegration analysis. In: Journal of Applied Statistics. 2004 ; Vol. 31, No. 5. pp. 533-544.
@article{2ef316066d4c40e9918328730da83d86,
title = "The demand for gasoline in China : a cointegration analysis",
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.",
keywords = "Cointegration analysis, Gasoline consumption, Price and income elasticities",
author = "CHEUNG, {Kui Yin} and Elspeth THOMSON",
year = "2004",
month = "1",
day = "1",
doi = "10.1080/02664760410001681837",
language = "English",
volume = "31",
pages = "533--544",
journal = "Journal of Applied Statistics",
issn = "0266-4763",
publisher = "Routledge",
number = "5",

}

The demand for gasoline in China : a cointegration analysis. / CHEUNG, Kui Yin; THOMSON, Elspeth.

In: Journal of Applied Statistics, Vol. 31, No. 5, 01.01.2004, p. 533-544.

Research output: Journal PublicationsJournal Article (refereed)

TY - JOUR

T1 - The demand for gasoline in China : a cointegration analysis

AU - CHEUNG, Kui Yin

AU - THOMSON, Elspeth

PY - 2004/1/1

Y1 - 2004/1/1

N2 - 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.

AB - 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.

KW - Cointegration analysis

KW - Gasoline consumption

KW - Price and income elasticities

UR - http://commons.ln.edu.hk/sw_master/7140

U2 - 10.1080/02664760410001681837

DO - 10.1080/02664760410001681837

M3 - Journal Article (refereed)

VL - 31

SP - 533

EP - 544

JO - Journal of Applied Statistics

JF - Journal of Applied Statistics

SN - 0266-4763

IS - 5

ER -