ECONOMICS CENTRE Gasoline Demand, Pricing Policy and Social Welfare in Iran Gasoline Demand, Pricing Policy and Social Welfare in Iran *

Majid Ahmadian, Mona Chitnis, Lester Hunt, Lester Hunt, Uk I Defg1, Seeds, Majid Ahmadian, Mona Chitnis, Lester Hunt, Majid Ahmadian, Mona Chitnis, Lester Hunt
2007 unpublished
This study estimates a gasoline demand function for Iran using the structural time series model over the period 1968-2002 and uses it to estimate the change in social welfare for 2003 and 2004 of a higher gasoline price policy. It is found that short and long run demand price elasticities are inelastic, although the response is greater in the long run. Hence, social welfare is estimated to fall because of the higher gasoline price (ceteris paribus). However, allowing all variables in the model
more » ... ables in the model to change, social welfare is estimated to increase since the changes in the other variables more than compensate for the negative effects of the policy. Gasoline Demand, Pricing Policy and Social Welfare in Iran
fatcat:33vg5nf4xjecldu6qhmwxgv4rq