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Driving for fun? Comparing the effect of fuel prices on weekday and weekend fuel consumption

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  • Frondel, Manuel
  • Vance, Colin

Abstract

Focusing on individual motorists in car-owning households in Germany, this paper investigates the determinants of automobile travel, with the specific aim of quantifying the effects of fuel prices and person-level attributes on travel conducted over a five-day week and weekend. Our analysis is predicated on the notion that car use is an individual decision, albeit one that is dependent on intra-household allocation processes, thereby building on a growing body of literature that has identified the importance of socioeconomic factors such as employment status, gender, and the presence of children in determining both access to and use of the car. To capture this two-stage decision process, we employ the two-part model, which consists of probit and OLS estimators, and derive elasticity estimates that incorporate both the discrete and continuous choices pertaining to car use. With fuel price elasticity estimates ranging between -Â 0.45 and -Â 0.50, our results suggest raising prices via fuel taxes to be a promising energy conservation and climate protection measure.

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 32 (2010)
Issue (Month): 1 (January)
Pages: 102-109

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Handle: RePEc:eee:eneeco:v:32:y:2010:i:1:p:102-109

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Web page: http://www.elsevier.com/locate/eneco

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Keywords: Automobile travel Two-part model Interaction effects;

References

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  1. Duan, Naihua, et al, 1984. "Choosing between the Sample-Selection Model and the Multi-part Model," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 283-89, July.
  2. Jonathan E. Hughes & Christopher R. Knittel & Daniel Sperling, 2008. "Evidence of a Shift in the Short-Run Price Elasticity of Gasoline Demand," The Energy Journal, International Association for Energy Economics, vol. 29(1), pages 113-134.
  3. Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 36(1), pages 1-25, January.
  4. Leung, S.F. & Yu, S., 1992. "On the Choice Between Sample Selection and Two-Part Models," RCER Working Papers 337, University of Rochester - Center for Economic Research (RCER).
  5. Hay, Joel W & Olsen, Randall J, 1984. "Let Them Eat Cake: A Note on Comparing Alternative Models of the Demand for Medical Care," Journal of Business & Economic Statistics, American Statistical Association, vol. 2(3), pages 279-82, July.
  6. Manuel Frondel & Jörg Peters & Colin Vance, 2007. "Identifying the Rebound - Evidence from a German Household Panel," Ruhr Economic Papers 0032, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  8. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
  9. Colin Vance & Ralf Hedel, 2007. "The impact of urban form on automobile travel: disentangling causation from correlation," Transportation, Springer, vol. 34(5), pages 575-588, September.
  10. Kayser, Hilke A., 2000. "Gasoline demand and car choice: estimating gasoline demand using household information," Energy Economics, Elsevier, vol. 22(3), pages 331-348, June.
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Citations

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Cited by:
  1. Yang, Dujuan & Timmermans, Harry, 2013. "Analysis of influence of fuel price on individual activity-travel time expenditure," Transport Policy, Elsevier, vol. 30(C), pages 40-55.
  2. Pfeiffer, Birte & Mulder, Peter, 2013. "Explaining the diffusion of renewable energy technology in developing countries," Energy Economics, Elsevier, vol. 40(C), pages 285-296.
  3. Colin Vance & Matthias Peistrup, 2012. "She’s got a ticket to ride: gender and public transit passes," Transportation, Springer, vol. 39(6), pages 1105-1119, November.
  4. Manurl Frondel & Colin Vance, 2009. "On Marginal and Interaction Effects: The Case of Heckit and Two-Part Models," Ruhr Economic Papers 0138, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Frondel, Manuel & Ritter, Nolan & Vance, Colin, 2012. "Heterogeneity in the rebound effect: Further evidence for Germany," Energy Economics, Elsevier, vol. 34(2), pages 461-467.
  6. Manuel Frondel & Colin Vance, 2012. "On Interaction Effects: The Case of Heckit and Two-Part Models," Ruhr Economic Papers 0309, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Nolan Ritter, 2012. "Beyond the Average Elasticity – Applying Quantile Panel Regression to German Household Mobility Data," Ruhr Economic Papers 0392, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  8. Costolanski, Peter & Elahi, Raihan & Iimi, Atsushi & Kitchlu, Rahul, 2013. "Impact evaluation of free-of-charge CFL bulb distribution in Ethiopia," Policy Research Working Paper Series 6383, The World Bank.
  9. Vivien Procher & Colin Vance, 2012. "Heterogeneity in the Correlates of Motorized and Non-Motorized Travel in Germany – The Intervening Role of Gender," Ruhr Economic Papers 0314, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  10. Tovar, Miguel A., 2011. "An integral evaluation of dieselisation policies for households' cars," Energy Policy, Elsevier, vol. 39(9), pages 5228-5242, September.

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