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Long-term fuel demand: Not only a matter of fuel price

  • Lampin, Laure B.A.
  • Nadaud, Franck
  • Grazi, Fabio
  • Hourcade, Jean-Charles

This paper analyzes the non-energy determinants of transport-related fuel consumption and in particular investigates the role of housing price trajectories in driving long-run demand for motor fuel. To this aim it develops a dynamic modeling framework and takes the next step of testing it for cointegration. French data spanning fifty years up to 2009 are employed. It is found that when facing an increase of dwellings’ real price, fuel demand remains stable in the short term whereas it increases significantly in the long term. Our results reflect the role of spatial organization in the formation of energy demand through the trade-off between housing prices and commuting costs. The modeling framework is then extended to assess the potential interest of combining housing policies aiming to drive down housing prices with carbon taxes so as to achieve a wide range of fuel demand reduction targets. It is shown that the relative contribution of housing policies increases with the degree of ambition of fuel consumption reduction targets.

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Article provided by Elsevier in its journal Energy Policy.

Volume (Year): 62 (2013)
Issue (Month): C ()
Pages: 780-787

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Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:780-787
Contact details of provider: Web page: http://www.elsevier.com/locate/enpol

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  1. Glaeser, Edward L. & Kahn, Matthew E., 2010. "The greenness of cities: Carbon dioxide emissions and urban development," Journal of Urban Economics, Elsevier, vol. 67(3), pages 404-418, May.
  2. Hourcade, Jean-Charles, 1993. "Modelling long-run scenarios : Methodology lessons from a prospective study on a low CO2 intensive country," Energy Policy, Elsevier, vol. 21(3), pages 309-326, March.
  3. Quigley, John M. & Raphael, Steven, 2006. "Regulation and the High Cost of Housing in California," Berkeley Program on Housing and Urban Policy, Working Paper Series qt3hh7s35m, Berkeley Program on Housing and Urban Policy.
  4. Glaeser, Edward L. & Kahn, Matthew E. & Rappaport, Jordan, 2008. "Why do the poor live in cities The role of public transportation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 1-24, January.
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  6. Brueckner, Jan K & Fansler, David A, 1983. "The Economics of Urban Sprawl: Theory and Evidence on the Spatial Sizes of Cities," The Review of Economics and Statistics, MIT Press, vol. 65(3), pages 479-82, August.
  7. Harvey, Andrew C. & Collier, Patrick, 1977. "Testing for functional misspecification in regression analysis," Journal of Econometrics, Elsevier, vol. 6(1), pages 103-119, July.
  8. Francois GUSDORF & Stéphane HALLEGATTE, . "Compact or Spread-Out Cities: Urban Planning, Taxation, and the Vulnerability to Transportation Shocks," Regional and Urban Modeling 284100017, EcoMod.
  9. Antonio M. Bento & Lawrence H. Goulder & Emeric Henry & Mark R. Jacobsen & Roger H. von Haefen, 2005. "Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study," American Economic Review, American Economic Association, vol. 95(2), pages 282-287, May.
  10. Akinboade, Oludele A. & Ziramba, Emmanuel & Kumo, Wolassa L., 2008. "The demand for gasoline in South Africa: An empirical analysis using co-integration techniques," Energy Economics, Elsevier, vol. 30(6), pages 3222-3229, November.
  11. Vermeulen, Wouter & van Ommeren, Jos, 2009. "Does land use planning shape regional economies? A simultaneous analysis of housing supply, internal migration and local employment growth in the Netherlands," Journal of Housing Economics, Elsevier, vol. 18(4), pages 294-310, December.
  12. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
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