Abstracto
- This paper aims at estimating the elasticity-price and income, regarding the gasoline demand in Panama, by means of a linear regression model, using data from national sources of quarterly frequency. The results show that the price elasticity of gasoline demand is considerably inelastic, which has important public policy implications such a tax and urban planning. There also seems to be evidence of a structural change after the COVID-19 pandemic, although it should be assessed with caution due to the limited size of the sample of the second period and the difference of estimation methods in both periods. The result suggests that the rise in the gasoline demand can be attributed mainly to the increase of income during the time of the study, yielding in the estimations that, gasoline demand is substantially responsive regarding changes in income.