Modelling and Estimating Gasoline Demand Using AIDS for Urban Low-Income Groups

Abstract

One of the biggest problems facing humanity today is the shortage of non-renewable groundwater resources. Since these resources have fewer alternatives, the onlyway to survive these resources is optimal utilization of them. The purpose ofthis study is to estimate the gasoline demand in urban low-income groups. Instead of a single equation of gasoline demand, demand is modelled as a multi-equation demand system. For this purpose, a low-income group is considered for which the AIDS is estimated and assumptions are reviewed. In this research, the demand for commodities of low-income group is investigated within urban households in Iran. Using time series data relating to 1991-2009 and AIDS equations, equations of commodity consumption expenditure were estimated using seemingly unrelated regressions. The results indicate that the gasoline is a luxury commodity for low-incomegroups. In addition, gasoline is a low attractive commodity for this group.