English Abstract
Abstract :
In the Kingdom of Bahrain, gasoline prices are fixed. In 2016 and then in 2018, the government increased some subsidies, raising the price of two types of gasoline in the Kingdom, high octane (premium) and regular (good). The current study looked at the impact of such price increases on new private car parameters, namely vehicle weight, engine size, fuel efficiency as well as CO2 emissions. Data for the first two parameters are available in the Kingdom, but fuel efficiency and CO2 emissions are not. The study first reviewed vehicle specifications to find fuel efficiency and CO2 emissions figures. Using a multiple dummy regression via ordinary least squares, the study found a significant relationship between gasoline price and new car parameters. Analysis of demand and weighted price elasticity of the midpoint also shows that in Bahrain, all vehicle parameters changed at relatively lower levels compared to gasoline price increases, which is in line with previous literature.
Keywords: Elasticity Econometrics, Bahrain Economy; Gasoline; Engine Size; Vehicle Weight; Fuel Efficiency; Greenhouse Gas Emissions
