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Fueling Electrification: The Impact of Gas Prices on Hybrid Car Usage

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  • Laura Grigolon
  • Eunseong Park
  • Kevin Remmy

Abstract

We use micro-level data on fuel consumption, mileage, and travel mode to study plug-in hybrid drivers' response to fuel prices. When fuel prices rise, plug-in hybrids reduce fuel consumption more than gasoline and diesel cars. They do not reduce their mileage but increase electric recharging, without evidence of habit formation. As the share of kilometers driven in electric mode by plug-in hybrids is only half the official test cycle value, fuel prices are effective in improving the environmental performance of these vehicles. Considering the choice of fueling versus recharging, we estimate that drivers value time at €15 to €41/hour.

Suggested Citation

  • Laura Grigolon & Eunseong Park & Kevin Remmy, 2024. "Fueling Electrification: The Impact of Gas Prices on Hybrid Car Usage," CRC TR 224 Discussion Paper Series crctr224_2024_494, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2024_494
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp494
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    References listed on IDEAS

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    More about this item

    Keywords

    plug-in-hybrids; fuel prices; fuel elasticities; value of time; fuel consumption; driving habit formation;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L71 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Hydrocarbon Fuels

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