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More Pain at the Diesel Pump? An Econometric Comparison of Diesel and Petrol Price Elasticities

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  • Manuel Frondel
  • Colin Vance

Abstract

The recent revision of the European Commission's Energy Tax Directive intends to tax fuels based on both energy content and related carbon dioxide emissions. To explore the implications of such a tax regime for automobile travel, this paper undertakes a comparative econometric analysis of price elasticities for diesel and petrol using panel estimation methods. Drawing on household panel data from Germany (1997-2009), we fail to reject the hypothesis that the fuel price elasticities for petrol and diesel are equal. © 2013 LSE and the University of Bath

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  • Manuel Frondel & Colin Vance, 2014. "More Pain at the Diesel Pump? An Econometric Comparison of Diesel and Petrol Price Elasticities," Journal of Transport Economics and Policy, University of Bath, vol. 48(3), pages 449-463, September.
    • Handle: RePEc:tpe:jtecpo:v:48:y:2014:i:3:p:449-463
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    Cited by:

    1. Givord, Pauline & Grislain-Letrémy, Céline & Naegele, Helene, 2018. "How do fuel taxes impact new car purchases? An evaluation using French consumer-level data," Energy Economics, Elsevier, vol. 74(C), pages 76-96.
    2. Frondel, Manuel, 2019. "CO2-Bepreisung in den nicht in den Emissionshandel integrierten Sektoren: Optionen für eine sozial ausgewogene Ausgestaltung," RWI Materialien 130, RWI - Leibniz-Institut für Wirtschaftsforschung.
    3. Mitra, Archisman & Alam, Mohammad Faiz & Yashodha, Yashodha, 2021. "Solar irrigation in Bangladesh: a situation analysis report," IWMI Books, Reports H050618, International Water Management Institute.
    4. Pier Basaglia & Sophie Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: How Tax Salience and Fuel Substitution Mediate Climate and Health Benefits," Discussion Papers of DIW Berlin 2041, DIW Berlin, German Institute for Economic Research.
    5. Bakhat, Mohcine & Labandeira, Xavier & Labeaga, José M. & López-Otero, Xiral, 2017. "Elasticities of transport fuels at times of economic crisis: An empirical analysis for Spain," Energy Economics, Elsevier, vol. 68(S1), pages 66-80.
    6. Frondel, Manuel & Schubert, Stefanie A., 2021. "Carbon pricing in Germany's road transport and housing sector: Options for reimbursing carbon revenues," Energy Policy, Elsevier, vol. 157(C).
    7. Pier Basaglia & Sophie M. Behr & Moritz A. Drupp, 2023. "De-Fueling Externalities: Causal Effects of Fuel Taxation and Mediating Mechanisms for Reducing Climate and Pollution Costs," CESifo Working Paper Series 10508, CESifo.
    8. Ghoddusi, Hamed & Morovati, Mohammad & Rafizadeh, Nima, 2022. "Dynamics of fuel demand elasticity: Evidence from Iranian subsidy reforms," Energy Economics, Elsevier, vol. 110(C).
    9. Yashodha, Yashodha & Sanjay, Aditi & Mukherji, Aditi, 2021. "Solar irrigation in India: a situation analysis report," IWMI Books, Reports H050619, International Water Management Institute.
    10. Frondel, Manuel & Martinez Flores, Fernanda & Vance, Colin, 2016. "Heterogeneous rebound effects: Comparing estimates from discrete-continuous models," Ruhr Economic Papers 601, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    11. Jacobs, Leif & Quack, Lara & Mechtel, Mario, 2022. "Distributional effects of carbon pricing by transport fuel taxation," Energy Economics, Elsevier, vol. 114(C).
    12. Leif Jacobs & Lara Quack & Mario Mechtel, 2021. "Distributional Effects of Carbon Pricing by Transport Fuel Taxation," Working Paper Series in Economics 405, University of Lüneburg, Institute of Economics.
    13. Shrestha, Shisher & Uprety, Labisha, 2021. "Solar irrigation in Nepal: a situation analysis report," IWMI Books, Reports H050620, International Water Management Institute.
    14. Gössling, Stefan & Metzler, Daniel, 2017. "Germany's climate policy: Facing an automobile dilemma," Energy Policy, Elsevier, vol. 105(C), pages 418-428.
    15. Simora, Michael & Vance, Colin, 2017. "Travel mode and tour complexity: The roles of fuel price and built environment," Ruhr Economic Papers 711, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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