versión impresa ISSN 0187-7372
In this paper we estimate the price elasticity of the demand for gasoline in Mexico. We use a panel of data that combines cross section, of the Mexican states, and monthly time-series data, from January 1997 to December 2003. The basic hypothesis that is confirmed in the paper is that gasoline demand is more sensitive to price changes in the Northern Border than in non-border regions. This result could justify the differential pricing policy adopted by the federal government, regarding the north-border region, since 2002.
Palabras llave : gasoline demand; price elasticity; governmental pricing policy; northern-border region; excise taxes.