Modelling Gasoline Demand in Ghana: A Structural Time Series Analysis

Abstract

Concerns about the role of energy consumption in global warming have led to policy designs that seek to reduce fossil fuel consumption or find a less polluting alternative especiallyfor the transport sector. This study seeks to estimate the elasticities of price, income, education and technology on transport gasoline demand sector inGhana. The Structural Time Series Model reports a short-run price and income elasticities of -0.0088 and 0.713. Total factor productivity is -0.408 whilstthe elasticity for education is 2.33. In the long run, the reported price and income elasticities are -0.065 and 5.129 respectively. The long run elasticityfor productivity is -2.935. The study recommends that in order to enhanceefficiency in gasoline consumption in the transport sector, there should beinvestment in productivity.