An adaptive intelligent algorithm for forecasting long term gasoline demand estimation: The cases of USA, Canada, Japan, Kuwait and Iran

Abstract

This study presents an adaptive intelligent algorithm for forecasting gasoline demand based of artificial neural network (ANN), conventional regression and design of experiment (DOE). To show the superiority and applicability of the proposed algorithm it has been applied for monthly demand estimation of gasoline in Japan, USA, Kuwait, Canada and Iran within 1992–2005. The economic indicators used in this paper are price, GDP (Gross Domestic Production), population, number of vehicles, gasoline demand in the last periods and correlation coefficient between variables. The proposed algorithm may be used to estimate gasoline demand in the future by optimizing parameter values. The proposed algorithm uses ANOVA to select either ANN or regression for future demand estimation. Furthermore, if the null hypothesis in ANOVA and F-test is rejected, the Duncan method is used to identify which model is closer to actual data at α level of significance. Neural network is an intelligent, adaptive and optimizing method for solving the complicated problems. The results show that ANN provides far less error than regression. Moreover, the proposed algorithm provides near optimal solution for gasoline demand estimation due to its flexibility and intelligibility. The intelligent algorithm is therefore ideal for policy making with respect to gasoline consumption estimation.