This study utilizes a pooled inter-country data set, finding the long-run price-elasticity falls in the range -0.55 to -0.9, depending on the choice of pooled estimators. The estimators included the OLS, within-, and between-country estimators, plus five feasible GLS estimators. Even allowing for a ten-year distributed lag on price to reflect changes in auto-efficiency characteristics, the within-country estimator yields appreciably more inelastic estimates than did the O:S estimator, which was heavily influenced by the between- or inter-country variation. This difference raises intriguing questions for future research.
ASJC Scopus subject areas
- Economics and Econometrics