High frequency evidence on the demand for gasoline

Laurence Levin, Matthew S. Lewis, Frank A. Wolak

Research output: Contribution to journalArticleResearchpeer-review

35 Citations (Scopus)


Daily city-level expenditures and prices are used to estimate the price responsiveness of gasoline demand in the United States. Using a frequency of purchase model that explicitly acknowledges the distinction between gasoline demand and gasoline expenditures, the price elasticity of demand is consistently found to be an order of magnitude larger than estimates from recent studies using more aggregated data. Estimating demand using higher levels of spatial and temporal aggregation is shown to produce increasingly inelastic estimates. A decomposition is then developed and implemented to understand the relative importance of several different factors in explaining this result.

Original languageEnglish
Pages (from-to)314-347
Number of pages34
JournalAmerican Economic Journal: Economic Policy
Issue number3
Publication statusPublished - Aug 2017
Externally publishedYes

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