The Review of Economics and Statistics Vol. 63 No. 1 1981
An Engel Curve for the Direct and Indirect Consumption of Oil
Abstract
An Engel curve is derived for the direct and indirect household consumption of oil and, hence, estimating the income elasticity for the demand for oil. Comparison with other studies is difficult as they have, in general, relied on time-series data. However, studies by Houthakker and Taylor (1970) and by Phlips (1972) derive short-run income elasticities close to the estimated value of 0.58 obtained in this study. Two points must be emphasized. First, the income elasticity is a short-run value and, therefore, indicates a lower bound for the long-run elasticity. Second, although this study takes account of both the direct and indirect demand for oil, it does pertain to consumer tastes and production technologies current in the early 1960s. On the latter point, an obvious extension of this study would be to update it using the 1972-73 Consumer Expenditure Survey. 23 references, 2 tables.
- DOI
- 10.2307/1924227
- Volume
- 63
- Issue
- 1
- Pages
- 132
- Sources
- openalex crossref