Capital Stock Adjustment Process and the Demand for Gasoline: A Market Share Approach

摘要

Most studies have estimated gasoline demand using various forms of a flow-adjustment model. Very few studies have explored the determination of the market share or the demand for cars by class. The Sweeney, Rand, and Chase studies deal with this market share problem with the use of distinctly different methodologies. Sweeney uses one equation to estimate the new car sales-weighted miles per gallon as a function of the price of gas and a technology factor. Rand estimates the miles per gallon of the stock of automobiles as a function of the price of gas and other variables. Chase estimates the demand for cars by class with the use of a variety of functional forms and variables. The present paper attempts to model the market shares of small, medium, and large cars with the use of commodity--hierarchy theory which provides a consistent specification for the demand equations. Then, using the estimated shares of classes of cars and estimates of vehicle miles, gasoline consumption is determined. While the results are not entirely satisfactory, they provide a well-developed framework for future analysis.