Empirical assessment of the determinants of road energy demand in Greece

This paper attempts to cast light on the determinants of road energy demand in Greece. For this purpose, we used cointegration techniques and vector autoregression (VAR) analysis in order to capture short-run and long-run dynamics for gasoline and diesel demand, respectively. From the empirical analysis that covers the period 1978-2003, we find that in the long-run gasoline energy demand appears to be price and income inelastic while diesel demand appears to be price inelastic and income elastic. We also found that the absence of close substitutes in the road sector denotes the low level of energy switching in Greece. (c) 2006 Elsevier B.V. All rights reserved.