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The determinants of fuel use in the trucking industry—volume, fleet characteristics and the rebound effect

  • De Borger, Bruno
  • Mulalic, Ismir

This paper studies the determinants of fuel use in the trucking industry in Denmark, using aggregate time series data for the period 1980–2007. The model captures the main linkages between the demand for freight transport, the characteristics of the vehicle fleet, and the demand for fuel. Results include the following. First, we precisely define and estimate a rebound effect of improvements in fuel efficiency in the trucking industry: behavioural adjustments in the industry imply that an exogenous improvement in fuel efficiency reduces fuel use less than proportionately. Our best estimate of this effect is approximately 10% in the short run and 17% in the long run, so that a 1% improvement in fuel efficiency reduces fuel use by 0.90% (short-run) to 0.83% (long-run). Second, we find that higher fuel prices raise the average capacity of trucks, and they induce firms to invest in newer, typically more fuel efficient, trucks. Third, these adjustments and the rebound effect jointly imply that the effect of higher fuel prices on fuel use in the trucking industry is fairly small; estimated price elasticities are −0.13 and −0.22 in the short run and in the long run, respectively. The empirical results of this paper have implications for judging the implications of fuel efficiency standards and regulations with respect to larger trucks in the EU.

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Article provided by Elsevier in its journal Transport Policy.

Volume (Year): 24 (2012)
Issue (Month): C ()
Pages: 284-295

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Handle: RePEc:eee:trapol:v:24:y:2012:i:c:p:284-295
DOI: 10.1016/j.tranpol.2012.08.011
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  1. Matos, Fernando J.F. & Silva, Francisco J.F., 2011. "The rebound effect on road freight transport: Empirical evidence from Portugal," Energy Policy, Elsevier, vol. 39(5), pages 2833-2841, May.
  2. Sathaye, Nakul & Horvath, Arpad & Madanat, Samer, 2010. "Unintended impacts of increased truck loads on pavement supply-chain emissions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(1), pages 1-15, January.
  3. Forkenbrock, David J., 1999. "External costs of intercity truck freight transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(7-8), pages 505-526.
  4. Parry, Ian W.H., 2006. "How Should Heavy-Duty Trucks Be Taxed?," Discussion Papers dp-06-23, Resources For the Future.
  5. Hymel, Kent M. & Small, Kenneth A. & Dender, Kurt Van, 2010. "Induced demand and rebound effects in road transport," Transportation Research Part B: Methodological, Elsevier, vol. 44(10), pages 1220-1241, December.
  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. Kenneth A. Small & Kurt Van Dender, 2006. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect," Working Papers 050603, University of California-Irvine, Department of Economics.
  8. George P. Baker & Thomas N. Hubbard, 2003. "Make Versus Buy in Trucking: Asset Ownership, Job Design, and Information," American Economic Review, American Economic Association, vol. 93(3), pages 551-572, June.
  9. Bonney, M. C., 1994. "Trends in inventory management," International Journal of Production Economics, Elsevier, vol. 35(1-3), pages 107-114, June.
  10. Kveiborg, Ole & Fosgerau, Mogens, 2007. "Decomposing the decoupling of Danish road freight traffic growth and economic growth," Transport Policy, Elsevier, vol. 14(1), pages 39-48, January.
  11. Thomas N. Hubbard, 2003. "Information, Decisions, and Productivity: On-Board Computers and Capacity Utilization in Trucking," American Economic Review, American Economic Association, vol. 93(4), pages 1328-1353, September.
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