Demand for gasoline in the GCC: an application of pooling and testing procedures

Abstract

The structure of gasoline demand in the GCC countries was analysed. The aim was to estimate price and income elasticities both for the short and long run. It was found that gasoline demand is inelastic with respect to both price and income for both the short and long run. When GCC countries were divided into two groups based on their pricing policies, it was found that the group with the free market approach and higher reliance on market forces gave larger price elasticities and smaller income elasticities in both the short run and long run.