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The Long-Run Structure of Transportation and Gasoline Demand

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  • William C. Wheaton

Abstract

This article reports estimates of a cross national model for automobile ownership, fleet fuel efficiency, driving per vehicle, and as derived from these three, gasoline consumption. The model is a recursive system of equations derived by aggregating individual behavioral equations for the choice of a durable good and its usage. The results suggest that across countries, gasoline price differences exert themselves primarily by affecting the amount of driving, and not as time series studies show, through fleet fuel efficiency. The estimates also suggest that gasoline consumption is much more income elastic than it was previously thought to be and that most of this income effect derives from the impact of income on auto ownership.

Suggested Citation

  • William C. Wheaton, 1982. "The Long-Run Structure of Transportation and Gasoline Demand," Bell Journal of Economics, The RAND Corporation, vol. 13(2), pages 439-454, Autumn.
  • Handle: RePEc:rje:bellje:v:13:y:1982:i:autumn:p:439-454
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    Cited by:

    1. Havranek, Tomas & Kokes, Ondrej, 2015. "Income elasticity of gasoline demand: A meta-analysis," Energy Economics, Elsevier, vol. 47(C), pages 77-86.
    2. 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.
    3. Tingting Wang & Cynthia Chen, 2014. "Impact of fuel price on vehicle miles traveled (VMT): do the poor respond in the same way as the rich?," Transportation, Springer, vol. 41(1), pages 91-105, January.
    4. Choo, Sangho, 2003. "Aggregate Relationships between Telecommunications and Travel: Structural Equation Modeling of Time Series Data," University of California Transportation Center, Working Papers qt4p78h623, University of California Transportation Center.
    5. Aydin, Erdal, 2016. "Energy conservation in the residential sector : The role of policy and market forces," Other publications TiSEM b9cedba8-1310-4097-90fb-b, Tilburg University, School of Economics and Management.
    6. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    7. Parry, Ian W.H. & Small, Kenneth A., 2004. "Does Britain or the United States Have the Right Gasoline Tax?," Discussion Papers 10461, Resources for the Future.
    8. Havranek, Tomas & Irsova, Zuzana & Janda, Karel, 2012. "Demand for gasoline is more price-inelastic than commonly thought," Energy Economics, Elsevier, vol. 34(1), pages 201-207.
    9. Elisheba Spiller & Heather Stephens & Christopher Timmins & Allison Smith, 2014. "The Effect of Gasoline Taxes and Public Transit Investments on Driving Patterns," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(4), pages 633-657, December.
    10. 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.
    11. Shanjun Li & Christopher Timmins & Roger H. von Haefen, 2009. "How Do Gasoline Prices Affect Fleet Fuel Economy?," American Economic Journal: Economic Policy, American Economic Association, vol. 1(2), pages 113-137, August.
    12. Agras, Jean & Chapman, Duane, 1998. "The Kyoto Protocol, Cafe Standards, and Gasoline Taxes," Working Papers 179365, Cornell University, Department of Applied Economics and Management.
    13. Le Vine, Scott & Chen, Bingqing (Emily) & Polak, John, 2014. "Does the income elasticity of road traffic depend on the source of income?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 67(C), pages 15-29.
    14. Sarah E. West & Roberton C. Williams III, 2005. "The Cost of Reducing Gasoline Consumption," American Economic Review, American Economic Association, vol. 95(2), pages 294-299, May.
    15. Martijn Brons & Peter Nijkamp & Eric Pels & Piet Rietveld, 2006. "A Meta-analysis of the Price Elasticity of Gasoline Demand. A System of Equations Approach," Tinbergen Institute Discussion Papers 06-106/3, Tinbergen Institute.
    16. Ingram, Gregory K. & Zhi Liu, 1997. "Motorization and the provision of roads in countries and cities," Policy Research Working Paper Series 1842, The World Bank.
    17. Ingram, Gregory K. & Zhi Liu, 1999. "Determinants of motorization and road provision," Policy Research Working Paper Series 2042, The World Bank.

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