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The Long-Run Structure of Transportation and Gasoline Demand

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  • William C. Wheaton
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    Abstract

    This article reports estimates of a cross national model for automobile ownership, fleet fuel efficiency, driving per vehicle, and as derived from these three, gasoline consumption. The model is a recursive system of equations derived by aggregating individual behavioral equations for the choice of a durable good and its usage. The results suggest that across countries, gasoline price differences exert themselves primarily by affecting the amount of driving, and not as time series studies show, through fleet fuel efficiency. The estimates also suggest that gasoline consumption is much more income elastic than it was previously thought to be and that most of this income effect derives from the impact of income on auto ownership.

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    Bibliographic Info

    Article provided by The RAND Corporation in its journal Bell Journal of Economics.

    Volume (Year): 13 (1982)
    Issue (Month): 2 (Autumn)
    Pages: 439-454

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    Handle: RePEc:rje:bellje:v:13:y:1982:i:autumn:p:439-454

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    Cited by:
    1. Ingram, Gregory K. & Zhi Liu, 1999. "Determinants of motorization and road provision," Policy Research Working Paper Series 2042, The World Bank.
    2. Parry, Ian & Small, Kenneth, 2002. "Does Britain or the United States Have the Right Gasoline Tax?," Discussion Papers dp-02-12-, Resources For the Future.
    3. Tingting Wang & Cynthia Chen, 2014. "Impact of fuel price on vehicle miles traveled (VMT): do the poor respond in the same way as the rich?," Transportation, Springer, vol. 41(1), pages 91-105, January.
    4. Shanjun Li & Roger von Haefen & Christopher Timmins, 2008. "How Do Gasoline Prices Affect Fleet Fuel Economy?," NBER Working Papers 14450, National Bureau of Economic Research, Inc.
    5. Ingram, Gregory K. & Zhi Liu, 1997. "Motorization and the provision of roads in countries and cities," Policy Research Working Paper Series 1842, The World Bank.
    6. Choo, Sangho, 2003. "Aggregate Relationships between Telecommunications and Travel: Structural Equation Modeling of Time Series Data," University of California Transportation Center, Working Papers qt4p78h623, University of California Transportation Center.
    7. Tomas Havranek & Ondrej Kokes, 2013. "Income Elasticity of Gasoline Demand: A Meta-Analysis," Working Papers IES 2013/02, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2013.
    8. Sarah E. West & Roberton C. Williams III, 2005. "The Cost of Reducing Gasoline Consumption," American Economic Review, American Economic Association, vol. 95(2), pages 294-299, May.

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