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Fuel Prices and Ambient Air Pollution: A Study of Sydney

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  • Paul J. Burke
  • Jian Li

Abstract

This paper explores the short‐run influence of road transport fuel prices on ambient air pollution over the period 2004–2023 for the case of Sydney, Australia. Using daily data from nine air quality monitoring stations, we find negative effects of fuel prices on ambient concentrations of several key pollutants including ozone, nitrogen dioxide and carbon monoxide, with inelastic effect sizes. Consistently significant effects are not found for sulphur dioxide or visibility impairment levels. Wind speeds, bushfire incidence and public holidays are found to be among other key factors affecting air conditions. We also explore monthly effects and the links between gasoline prices and Google relative search interest in air pollution and related terms. The findings are useful for air pollution prediction and add to understanding of the environmental benefits of fuel taxes.

Suggested Citation

  • Paul J. Burke & Jian Li, 2026. "Fuel Prices and Ambient Air Pollution: A Study of Sydney," The Economic Record, The Economic Society of Australia, vol. 102(336), pages 27-46, March.
    • Handle: RePEc:bla:ecorec:v:102:y:2026:i:336:p:27-46
    DOI: 10.1111/1475-4932.70013
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    References listed on IDEAS

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    2. Tong Zhang & Paul J. Burke, 2021. "Fuel prices and road deaths: motorcyclists are different," CAMA Working Papers 2021-79, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
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    4. Mr. Simon Black & Ian W.H. Parry & Mr. Victor Mylonas & Nate Vernon-Lin & Karlygash Zhunussova, 2023. "The IMF-World Bank Climate Policy Assessment Tool (CPAT): A Model to Help Countries Mitigate Climate Change," IMF Working Papers 2023/128, International Monetary Fund.
    5. Vera Z. Eichenauer & Ronald Indergand & Isabel Z. Martínez & Christoph Sax, 2022. "Obtaining consistent time series from Google Trends," Economic Inquiry, Western Economic Association International, vol. 60(2), pages 694-705, April.
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    7. Pang, Jindong & An, Lan & Shen, Shulin, 2023. "Gasoline prices, traffic congestion, and carbon emissions," Resource and Energy Economics, Elsevier, vol. 75(C).
    8. Paul J. Burke & Shuhei Nishitateno, 2015. "Gasoline Prices And Road Fatalities: International Evidence," Economic Inquiry, Western Economic Association International, vol. 53(3), pages 1437-1450, July.
    9. Gao, Jiti & Peng, Bin & Smyth, Russell, 2021. "On income and price elasticities for energy demand: A panel data study," Energy Economics, Elsevier, vol. 96(C).
    10. Rohan Best & Paul J. Burke, 2019. "Fuel prices and road accident outcomes in New Zealand," New Zealand Economic Papers, Taylor & Francis Journals, vol. 53(2), pages 109-124, May.
    11. Burke, Paul J. & Nishitateno, Shuhei, 2013. "Gasoline prices, gasoline consumption, and new-vehicle fuel economy: Evidence for a large sample of countries," Energy Economics, Elsevier, vol. 36(C), pages 363-370.
    12. 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.
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