TY  - UNPD
A1  - Kilian, Lutz
A1  - Zhou, Xiaoqing
T1  - Heterogeneity in the pass-through from oil to gasoline prices: a new instrument for estimating the price elasticity of gasoline demand
N2  - We propose a new instrument for estimating the price elasticity of gasoline demand that exploits systematic differences across U.S. states in the pass-through of oil price shocks to retail gasoline prices. These differences, which are primarily driven by variation in the cost of producing and distributing gasoline, create cross-sectional dispersion in gasoline price growth in response to an aggregate oil price shock. We find that the elasticity was stable near -0.3 until the end of 2014, but subsequently rose to about -0.2. Our estimates inform the recent debate about gasoline-tax holidays and policies to reduce carbon emissions.
T3  - CFS working paper series - No. 685 
KW  - Price elasticity of gasoline demand
KW  - pass-through
KW  - gasoline tax
KW  - gasoline supply
KW  - identification
KW  - IV
KW  - cross-section
Y1  - 2022
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/68075
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30:3-680751
UR  - https://ssrn.com/abstract=4360633
VL  - January 14, 2023
PB  - Center for Financial Studies
CY  - Frankfurt, M.
ER  -