The variability of gasoline demand in Cameroon

Abstract

ABSTRACTIn this study, three models were used and historical data were considered for the years 1994–2013 to estimate short- and long-run price and income elasticities of gasoline demand in Cameroon. All three models produce significant estimates with price elasticity ranging between −1.433 and −0.151, while income elasticities range between 0.179 and 1.801. As it is the case in other developing countries where gasoline elasticities have been reported, consumers are highly inelastic in the short run whereas elasticities are greater than unity in the long run. This shows that gasoline demand in the long run is principally determined by the pace of economic activity. These results are in accordance with findings in three other African countries with comparable demographics to that of Cameroon. The results are useful in implementing policies aimed at regulating gasoline demand through price changes.