method is applied to gasoline demand in the United States and is applicable to other goods. The method uses shape … price responsiveness of gasoline demand and the way responses vary across the income distribution. We find that price … changes in gasoline prices than are middle-income consumers. We find similar results using comparable data from Canada. …

show the importance of such measurement errors for the estimation of demand in a setting with nonseparable unobserved … group rather than the true individual value. In consumer demand this form of measurement error is present because the price … heterogeneity. We develop a consistent estimator using external information on the true distribution of prices. Examining the demand …

price as instruments for a country's average gasoline pump price. We obtain estimates of the long-run price elasticity of … gasoline demand of between −0.2 and −0.5. Using newly available data for a sub-sample of 43 countries, we also find that higher … gasoline prices induce consumers to substitute to vehicles that are more fuel-efficient, with an estimated elasticity of 0 …