Forecasting Gasoline Demand In C Anada Over The Period 2018-2028

We will test the following five models and use the most accurate method to predict the Canadian gasoline consumption for the next 10 years:linear trend model,quadratic trend model,exponential trend model,partial adjustment model and autoregressive model.Four of the five models gave good results when the percentage of prediction was less than 5%.However,the autoregressive model gave the best results,with an accuracy of 1.98%,with a difference of only 6.27 litres per quarter.Therefore,we will use AR model to forecast gasoline demand in the next 10 years.In addition,the partial adjustment model enables us to obtain the elasticity of short-term income to price.When income increases by 10%,the per capita demand for gasoline increases by 4.3%,while when price increases by 1%,the demand for gasoline decreases by 0.15%.With more and more Canadians paying attention to environmental issues,the public policy of energy saving and emission reduction has been put forward to the transportation sector.One of them is to increase gasoline taxes,thereby raising the price of gasoline and forcing consumers to reduce greenhouse car emissions.However,it is important that the price growth rate be higher than that of disposable income.Otherwise,this policy will not work because,according to previous studies,the impact of income on gasoline consumption is more obvious than that of price.For example,according to the short-term elasticity obtained by PAM,if tax policy increases gasoline prices by 10%and income by 10%,gasoline consumption will increase by 2.8%.However,understanding the citizens'response to taxinduced price changes makes it relatively easy for the government to predict policy effectiveness and short-term and long-term tax revenue.