Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
This paper presents new gasoline demand price elasticity estimates for California. We use unique characteristics of California’s gasoline market and a new set of proposed instruments. As a first step, we take advantage of California’s unique gasoline market, which is partially isolated from the rest of the United States due to environmental regulations. We control for persistent demand shocks and estimate a lower bound for the long-run elasticity of demand of −0.23. In the second step, we use a new set of instruments to control for simultaneity. We use detailed information on refinery outages to capture short-run supply shocks. Our estimate of long-run demand elasticity is −0.60.