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Oil Price Uncertainty, Transport Fuel Demand and Public Health

Author

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  • Ling-Yun He

    (School of Economics, Jinan University, Guangzhou 510632, China
    Institute of Resource, Environment and Sustainable Development Research, Jinan University, Guangzhou 510632, China
    School of Economics and Management, Nanjing University of Information Science and Technology, Nanjing 210044, China)

  • Sheng Yang

    (Huaxia Bank and Renmin University of China Joint Postdoctoral Research Station, Beijing 100005, China)

  • Dongfeng Chang

    (School of Economics, Shandong University, Jinan 250100, China)

Abstract

Based on the panel data of 306 cities in China from 2002 to 2012, this paper investigates China’s road transport fuel (i.e., gasoline and diesel) demand system by using the Almost Ideal Demand System (AIDS) and the Quadratic AIDS (QUAIDS) models. The results indicate that own-priceelasticitiesfordifferentvehiclecategoriesrangefrom−1.215to−0.459(byAIDS)andfrom −1.399 to−0.369 (by QUAIDS). Then, this study estimates the air pollution emissions (CO, NOx and PM2.5) and public health damages from the road transport sector under different oil price shocks. Compared to the base year 2012, results show that a fuel price rise of 30% can avoid 1,147,270 tonnes of pollution emissions; besides, premature deaths and economic losses decrease by 16,149 cases and 13,817.953 million RMB yuan respectively; while based on the non-linear health effect model, the premature deaths and total economic losses decrease by 15,534 and 13,291.4 million RMB yuan respectively. Our study combines the fuel demand and health evaluation models and is the first attempt to address how oil price changes influence public health through the fuel demand system in China. Given its serious air pollution emission and substantial health damages, this paper provides important insights for policy makers in terms of persistent increasing in fuel consumption and the associated health and economic losses.

Suggested Citation

  • Ling-Yun He & Sheng Yang & Dongfeng Chang, 2017. "Oil Price Uncertainty, Transport Fuel Demand and Public Health," IJERPH, MDPI, vol. 14(3), pages 1-19, March.
    • Handle: RePEc:gam:jijerp:v:14:y:2017:i:3:p:245-:d:91881
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    Cited by:

    1. Bansal, Prateek & Dua, Rubal, 2022. "Fuel consumption elasticities, rebound effect and feebate effectiveness in the Indian and Chinese new car markets," Energy Economics, Elsevier, vol. 113(C).

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