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Evidence for an endogenous rebound effect impacting long-run car use elasticity to fuel price

Author

Listed:
  • Emmanuel Kemel

    () (CES, Université Paris 1, Panthéon Sorbonne & CETE Ouest)

  • Roger Collet

    () (IFSTTAR)

  • Laurent Hivert

    () (IFSTTAR)

Abstract

This paper presents a structural equation model of household fleet fuel efficiency and car use. It allows to weigh the contribution of car equipment changes and car use adjustments to the price elasticity of household demand for fuel. This model is implemented using a panel dataset of 322 households that were present in each annual wave of the French Car Fleet survey from 1999 to 2007. The longitudinal dimension of this dataset enables to assess the short and long-run adjustments at the household level over a period of fuel price increase. The estimated price elasticities of the demand for fuel are fully consistent with the literature: -0.30 in the short run and -0.76 in the long run. Regarding car use elasticities, accounting for an endogenous rebound effect allowed a striking finding: the sensitivity of household car use to fuel price changes is lower on the long run than on the short run. This paper thus not only provides the latest estimations of elasticities for France, in the early 2000's, it also shows that, on the long run, French households have managed to mitigate the impact of increasing fuel prices on their car mobility by using more fuel efficient cars.

Suggested Citation

  • Emmanuel Kemel & Roger Collet & Laurent Hivert, 2011. "Evidence for an endogenous rebound effect impacting long-run car use elasticity to fuel price," Economics Bulletin, AccessEcon, vol. 31(4), pages 2777-2786.
  • Handle: RePEc:ebl:ecbull:eb-11-00049
    as

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    References listed on IDEAS

    as
    1. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
    2. Hansen, Lars Peter, 1982. "Large Sample Properties of Generalized Method of Moments Estimators," Econometrica, Econometric Society, vol. 50(4), pages 1029-1054, July.
    3. Erich Battistin & Raffaele Miniaci & Guglielmo Weber, 2003. "What Do We Learn from Recall Consumption Data?," Journal of Human Resources, University of Wisconsin Press, vol. 38(2).
    4. Daniel J. Graham & Stephen Glaister, 2002. "The Demand for Automobile Fuel: A Survey of Elasticities," Journal of Transport Economics and Policy, University of Bath, vol. 36(1), pages 1-25, January.
    5. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    6. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
    7. Cuenot, François, 2009. "CO2 emissions from new cars and vehicle weight in Europe; How the EU regulation could have been avoided and how to reach it?," Energy Policy, Elsevier, vol. 37(10), pages 3832-3842, October.
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    Cited by:

    1. Roger Collet & Laurent Hivert & Jean-Loup Madre, 2012. "Diffusion de l’automobile en France : vers quels plafonds pour la motorisation et l’usage ?," Économie et Statistique, Programme National Persée, vol. 457(1), pages 123-139.

    More about this item

    Keywords

    Elasticity; Fuel Price; Rebound effect; Energy consumption; Energy efficiency; Car use; Household; Panel data;

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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