The Price of Gasoline and New Vehicle Fuel Economy: Evidence from Monthly Sales Data
AbstractThis paper uses a unique dataset of monthly new vehicle sales by detailed model from 1978 to 2007, and implements a new identification strategy to estimate the effect of the price of gasoline on individual vehicle model sales. We control for unobserved vehicle and consumer characteristics by using within model year changes in the price of gasoline and sales. We find a significant sales response, suggesting that the gasoline price increase from 2002 to 2007 explains nearly half of the decline in market share of US manufacturers. On the other hand, an increase in the gasoline tax would only modestly raise average fuel economy. (JEL H25, L11, L62, L71)
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Economic Policy.
Volume (Year): 2 (2010)
Issue (Month): 3 (August)
Find related papers by JEL classification:
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment
- L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Shanjun Li & Joshua Linn & Erich Muehlegger, 2012.
"Gasoline Taxes and Consumer Behavior,"
NBER Working Papers
17891, National Bureau of Economic Research, Inc.
- Spiller, Elisheba & Stephens, Heather M. & Timmins, Christopher & Smith, Allison, 2012. "Does the Substitutability of Public Transit Affect Commuters’ Response to Gasoline Price Changes?," Discussion Papers dp-12-29, Resources For the Future.
- Anderson, Soren T. & Kellogg, Ryan & Sallee, James M., 2013.
"What do consumers believe about future gasoline prices?,"
Journal of Environmental Economics and Management,
Elsevier, vol. 66(3), pages 383-403.
- Soren T. Anderson & Ryan Kellogg & James M. Sallee, 2011. "What Do Consumers Believe About Future Gasoline Prices?," NBER Working Papers 16974, National Bureau of Economic Research, Inc.
- Huse, Cristian, 2014. "Fast and Furious (and Dirty): How Asymmetric Regulation May Hinder Environmental Policy," MPRA Paper 48909, University Library of Munich, Germany.
- Spiller, Elisheba & Stephens, Heather M., 2012. "The Heterogeneous Effects of Gasoline Taxes: Why Where We Live Matters," Discussion Papers dp-12-30, Resources For the Future.
- Meghan R. Busse & Christopher R. Knittel & Florian Zettelmeyer, 2012. "Who is Exposed to Gas Prices? How Gasoline Prices Affect Automobile Manufacturers and Dealerships," NBER Working Papers 18610, National Bureau of Economic Research, Inc.
- Espey, Molly, 2013. "Automobile Fuel Economy: Under-valued, Over-valued, or Both?," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150691, Agricultural and Applied Economics Association.
- Wolff, Hendrik, 2014. "Value of time: Speeding behavior and gasoline prices," Journal of Environmental Economics and Management, Elsevier, vol. 67(1), pages 71-88.
- Antonio M. Bento & Jonathan E. Hughes & Daniel T. Kaffine, 2012.
"Carpooling and Driver Responses to Fuel Price Changes: Evidence from Traffic Flows in Los Angeles,"
2012-06, Colorado School of Mines, Division of Economics and Business.
- Bento, Antonio M. & Hughes, Jonathan E. & Kaffine, Daniel, 2013. "Carpooling and driver responses to fuel price changes: Evidence from traffic flows in Los Angeles," Journal of Urban Economics, Elsevier, vol. 77(C), pages 41-56.
- Hunt Allcott & Nathan Wozny, 2012. "Gasoline Prices, Fuel Economy, and the Energy Paradox," NBER Working Papers 18583, National Bureau of Economic Research, Inc.
- Klier, Thomas & Linn, Joshua, 2013. "Technological Change, Vehicle Characteristics, and the Opportunity Costs of Fuel Economy Standards," Discussion Papers dp-13-40, Resources For the Future.
- Burke, Paul J. & Nishitateno, Shuhei, 2013.
"Gasoline prices, gasoline consumption, and new-vehicle fuel economy: Evidence for a large sample of countries,"
Elsevier, vol. 36(C), pages 363-370.
- Paul J. Burke & Shuhei Nishitateno, 2011. "Gasoline prices, gasoline consumption, and new-vehicle fuel economy: Evidence for a large sample of countries," Departmental Working Papers 2011-15, The Australian National University, Arndt-Corden Department of Economics.
- McConnell, Virginia, 2013. "The New CAFE Standards: Are They Enough on Their Own?," Discussion Papers dp-13-14, Resources For the Future.
- Bruno De Borger & Ismir Mulalic & Jan Rouwendal, 2013. "Substitution between Cars within the Household," Tinbergen Institute Discussion Papers 13-158/VIII, Tinbergen Institute.
- Huse, Cristian & Lucinda, Claudio, 2013. "The Market Impact and the Cost of Environmental Policy: Evidence from the Swedish Green Car Rebate," MPRA Paper 48905, University Library of Munich, Germany.
- Wolff, Hendrik, 2012. "Value of Time: Speeding Behavior and Gasoline Prices," IZA Discussion Papers 6788, Institute for the Study of Labor (IZA).
- Klier, Thomas & Linn, Joshua, 2013. "Fuel prices and new vehicle fuel economy—Comparing the United States and Western Europe," Journal of Environmental Economics and Management, Elsevier, vol. 66(2), pages 280-300.
- Steinhilber, Simone & Wells, Peter & Thankappan, Samarthia, 2013. "Socio-technical inertia: Understanding the barriers to electric vehicles," Energy Policy, Elsevier, vol. 60(C), pages 531-539.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros) or (Michael P. Albert).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.