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Do High Oil Prices Matter? Evidence on the Mobility Behavior of German Households

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  • Manuel Frondel

    ()

  • Colin Vance

    ()

Abstract

Focusing on travel survey data from Germany, this paper investigates the determinants of automobile travel, with the specific aim of quantifying the effects of fuel prices and fuel economy. The analysis is predicated on the notion that car mileage is a two-stage decision process, comprising the discrete choice of whether to own a car and the continuous choice of distance traveled. To capture this process, we employ censored regression models consisting of Probit and OLS estimators, which allows us to gauge the extent to which sample selectivity may bias the results. Our elasticity estimates indicate a significant positive association between increased fuel economy and increased driving, and a significantly negative fuel-price elasticity, which ranges between –35% and –41%.Taken together, these results suggest that fuel taxes are likely to be a more effective policy measure in reducing emissions than fuelefficiency standards.

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File URL: http://hdl.handle.net/10.1007/s10640-008-9246-4
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 43 (2009)
Issue (Month): 1 (May)
Pages: 81-94

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Handle: RePEc:kap:enreec:v:43:y:2009:i:1:p:81-94

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Automobile travel; Rebound effect; Two-Part Model; D13; Q41;

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References

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  1. 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).
  2. 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.
  3. 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.
  4. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January.
  5. David L. Greene & James R. Kahn & Robert C. Gibson, 1999. "Fuel Economy Rebound Effect for U.S. Household Vehicles," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-31.
  6. Kenneth A. Small & Kurt Van Dender, 2006. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect," Working Papers 050603, University of California-Irvine, Department of Economics.
  7. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
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Citations

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Cited by:
  1. Ritter, Nolan & Vance, Colin, 2013. "Do fewer people mean fewer cars? Population decline and car ownership in Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 50(C), pages 74-85.
  2. 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.
  3. Manuel Frondel & Colin Vance, 2013. "On Interaction Effects: The Case of Heckit and Two-Part Models," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 233(1), pages 22-38, January.
  4. Alistair Munro, 2009. "Introduction to the Special Issue: Things We Do and Don’t Understand About the Household and the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 43(1), pages 1-10, May.
  5. Manuel Frondel & Colin Vance, 2010. "Fixed, Random, or Something in Between? – A Variant of HAUSMAN’s Specifi cation Test for Panel Data Estimators," Ruhr Economic Papers 0160, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Nolan Ritter & Colin Vance, 2012. "Do Fewer People Mean Fewer Cars? – Population Decline and Car Ownership in Germany," Ruhr Economic Papers 0385, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  7. Martin Achtnicht, 2012. "German car buyers’ willingness to pay to reduce CO 2 emissions," Climatic Change, Springer, vol. 113(3), pages 679-697, August.
  8. Jens Boysen-Hogrefe, 2013. "Der Einfluss des Erdölpreises auf die Energiesteuerprognose," Kiel Working Papers 1849, Kiel Institute for the World Economy.
  9. Nolan Ritter & Christoph M. Schmidt & Colin Vance, 2013. "How Full Is the tank? – Insights on Short-run Fuel Price Reactions from German Travel Diary Data," Ruhr Economic Papers 0401, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  10. Colin Vance & Markus Mehlin, 2009. "Tax Policy and CO2 Emissions – An Econometric Analysis of the German Automobile Market," Ruhr Economic Papers 0089, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  11. Frondel, Manuel & Schmidt, Christoph M. & Vance, Colin, 2011. "A regression on climate policy: The European Commission’s legislation to reduce CO2 emissions from automobiles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1043-1051.
  12. Achtnicht, Martin, 2009. "German car buyers' willingness to pay to reduce CO2 emissions," ZEW Discussion Papers 09-058, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  13. Stela Rubínová, 2011. "Reaction of Household Energy Demand to Improvements in Energy Efficiency: Theory and Its Implications for the Construction of Empirically Tested Models," Politická ekonomie, University of Economics, Prague, vol. 2011(3), pages 359-378.
  14. Manuel Frondel & Colin Vance, 2013. "Fuel Taxes versus Efficiency Standards – An Instrumental Variable Approach," Ruhr Economic Papers 0445, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.

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