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Car use behaviour of Spanish households: Differences for quartile income groups and transport policy implications
Abstract
The aim of this paper is to estimate fuel demand behaviour related to car use by households with different income levels in Spain using micro-level panel data in order to infer public policy implications. Our results show that the income elasticity of fuel demand is highest for the lowest income group and diminishes monotonically for the others. The price elasticity is highest in absolute value for the lowest income group, lowest for the highest income quartile and similar for the medium-low and medium-high income groups. Finally, the lowest income group is the most responsive to changes in the price of public transport, whereas the medium-low income group is the least responsive. This suggests that pricing policies aiming to reduce car fuel consumption would have different distributive impacts. Thus, the two main pricing transport policies, fuel taxes and public transport subsidies, are deemed complementary and their combination could be defended on distributional grounds.
... Travel behaviour varies with regard to the income in both developed and developing countries (Burguillo et al., 2017;Diaz Olvera et al., 2015;Manoj and Verma, 2015;Mallett, 2001). Respective variation in the travel behaviour with regard to socio-economic groups influences energy consumption pattern (Burguillo et al., 2017;Carlsson-Kanyama and Linden, 1999), emissions (Buchs and Schnepf, 2013), expenditure pattern (Falavigna and Hernandez, 2016;Olvera et al., 2008) and health indicators (Matsushita et al., 2015). ...
... Travel behaviour varies with regard to the income in both developed and developing countries (Burguillo et al., 2017;Diaz Olvera et al., 2015;Manoj and Verma, 2015;Mallett, 2001). Respective variation in the travel behaviour with regard to socio-economic groups influences energy consumption pattern (Burguillo et al., 2017;Carlsson-Kanyama and Linden, 1999), emissions (Buchs and Schnepf, 2013), expenditure pattern (Falavigna and Hernandez, 2016;Olvera et al., 2008) and health indicators (Matsushita et al., 2015). Income influences the affordability of the households to own and use personal motorized vehicles (PMV) that include both car and motorized twowheeler (MTW) (Li et al., 2015;Tirumalachetty et al., 2013;Cheng et al., 2013;Scholl, 2002;de Palma and Rochat, 2000). ...
... Diaz Olvera et al. (2015) identified the need to use better tools for estimating the variation in travel behaviour across income groups. Burguillo et al., (2017) has used household expenditure as the proxy of income to assess income elasticity to fuel demand in Spain. Olvera et al. (2008) applied both income and expenditure data to understand the variation in transport expenditure among socio-economic groups in Sub-Saharan cities. ...
Travel behaviour varies with respect to the income. Directly reported incomes used in the travel behaviour studies are subject to the issues of under and non-reporting. To account for this, we propose principal component analysis (PCA) on household asset ownership data to estimate socio-economic wellbeing score (SEWS) as the proxy of income. SEWS is used to understand the variation in travel behaviour of people belonging to different income groups in Vishakhapatnam. We have used sample data of 2623 households collected in 2012–2013. Internal coherency test and chi-square tests are conducted to assess the robustness of estimated SEWS.
Travel behaviour analysis highlights that both the trip length and mode choice significantly varies with regard to the SEWS in Vishakhapatnam. People belonging to the low and low middle SEWS group are more dependent on walking and travel shorter distances as compared to the middle high and very high SEWS group. Encouraging the middle high and very high SEWS group to travel short distances and use low carbon modes of transport will need interventions related to the development control regulations and infrastructure provision. Since SEWS is estimated using multiple variables and captures the consumption pattern of the households, therefore, it can be used as the proxy of income in travel behaviour studies.
... Income has been documented to influence household motorization rates and the use of personal motorised vehicles for commuting [31][32][33][34][35]. It has also been shown that, in developing countries, reliance on walking trips is due not so much to environmental awareness but instead to the economic constraints of households due to less available resources for transport costs [33,36,37], this being a factor of inequity in transport use Haga clic o pulse aquí para escribir texto.. Some of the empirical evidence indicates that, in general, travel patterns vary concerning income and socio-economic characteristics [38] and is a phenomenon observable in both developed and developing countries [38][39][40]. This is why the presence of urban facilities in all their dimensions, accessibility to services, and the safety of the environment are some of the basic assumptions necessary to reduce social and urban inequalities and to configure sustainable, resilient territories and cities where travel patterns are configured in environments in an ideal of 15 min [12,41]. ...
Urban sustainability and sustainable mobility have become the central focus of sustainable development initiatives. The city of 15 models seeks to ensure that urban development is sustainable. This paper evaluates the current state of mobility and the use of sustainable transport in the specific context of the city of Antofagasta, which, due to its characteristics of urban expansion and its mining activity, has been considered an international reference case. In particular, we study how the current urban structure shapes the city’s travel patterns and identify opportunities for public policy actions to focus their investment and urban intervention efforts on the essential aspects that make it possible to achieve 15- or 20-min territories. The results reveal the need for urban development initiatives to focus on improving the supply of goods and services in areas with low installed capacity, promoting the culture of micro-neighbourhoods, and encouraging cycling. In particular, only 10% of trips, for all purposes and all modes of transport, are completed in less than 15 min. And about 58% of trips, for all purposes and all modes, are completed in less than 30 min. In the marginal effects of the multinomial logit model, a one-unit increase in travel time increases the probability of choosing to travel by public transport by 63% and decreases the probability of walking by 41%.
... [51] grouped the reading efficiency and eye movement measurements of American primary, middle, and high school students through the quartile. [52] studied the car use behavior of Spanish households and divided household income into groups by quartile to explore the impact of differences between groups and traffic policies. Based on these quartile grouping studies, this study seeks to determine how OECD member states weigh economic development and greenhouse gas emissions and uses algorithm 1 to conduct grouping discrimination of research questions. ...
... There are other works analysing whether the policy of price subsidies can prompt a modal shift. Several studies show that PT subsidies do not meet the efficiency criteria given the low cross-price elasticity of demand of private transport with respect to the price of PT, which reduces the effectiveness of the subsidy as a mechanism for changing the transport modality (see Asensio et al., 2003;Burguillo, del Río, & Romero-Jordán, 2017;Pestana and Prieto, 2008). Among the works focused on Madrid, Matas (2004) and Jalón et al. (2014) analyse the efficiency of PT demand public policy for the case of Madrid. ...
This article assesses the impact of a subsidy for public transport prices in the Madrid Region for the elderly on PT and automotive household expenditures. Data from the Spanish Household Budget Survey and a discontinuity regression model are used to analyse this PT policy from an equity and efficiency point of view. The results show that as a consequence of this public policy, households from quartiles 1 and 2 whose main-breadwinner is elderly and not employed have reduced their expenditure on PT by 83.9% and 65.3% respectively, and households from quartile 1 having an employed and elderly main-breadwinner have reduced it by 106.4%. All these households have been the main beneficiaries of the policy in terms of economic well-being. Therefore, in distributive and equity terms these subsidies benefit the poorest households among those whose main breadwinner is an elderly, and the richest ones. In terms of efficiency, the high increase of the relative price of automotive fuel due to PT subsidization has only had an impact on households in which the main breadwinner is elderly and not employed, concretely those households from quartiles 1, 2, and 3 have reduced their expenditure on automotive fuel by 38.8%, 30.3% and 51.9%, respectively.
... Socio-economic status. One prominent determinant of socioeconomic status used in studies analysing travel behaviour in both developed and developing economies is income (Ahmad and Puppim de Oliveira, 2016;Burguillo et al., 2017;Manoj and Verma, 2015;Olvera et al., 2015). This socio-economic factor crucially controls the ability to privately own and use motorized vehicles (Li et al., 2012). ...
Purpose
Using survey data of a developing country city, this study aims to examine the impact of different socio-demographic factors on the choice of less-polluting modes of transport for purposes other than work.
Design/methodology/approach
Stratified random sampling technique is employed and data on socio-demographic characteristics and mode of transport used is collected. Descriptive statistics complemented with a logit model of choice probabilities is implemented on the data obtained.
Findings
Majority of the population in the city uses motorized means of transportation irrespective of the socio-demographic changes existing among them. Women, the individuals belonging to the youngest age group, the least economically well-off group of people, the least educated and the non-working are the individuals more likely to use more of less-polluting modes and less of more-polluting modes for non-work purposes as compared to their counterparts.
Research limitations/implications
The study also calls for the development of an efficient and secured system of public transportation and non-motorized transportation in the city in such a way so as to neither hamper the goal of sustainability nor the goal of empowerment.
Originality/value
To the best of the authors’ knowledge, this is the first time a comprehensive analysis of the influence of socio-demographic factors on choice of type of mode of transport is carried out in this region of the developing world. This analysis will facilitate the policy makers in catering to the transportation needs of different segments of the society.
... Income is one indispensable element determining travel behaviour in both developed and developing economies (Ahmad & Puppim de Oliveira, 2016; Burguillo et al., 2017;Diaz Olvera et al., 2015;Manoj & Verma, 2015). Income not only determines the socio-economic status of individuals but also their ability to own and use motorized vehicles (Li et al., 2012). ...
Climate change, fuelled by the growing transportation sector, is a pressing global challenge. There is a need to promote such a system of transportation, which is not only efficient but also sustainable. Using descriptive statistics complemented with a logit model of choice probabilities implemented on survey data from a city in a developing country, this study aims to examine the impact ‘of different socio-economic factors on the choice of sustainable modes of transport while also highlighting how these choices are different for men and women—the group of working population, those with the highest level of education, the group which is the most socio-economically well-off and the population of men most unlikely to prefer sustainable modes of transport. The study emphasizes the need to incorporate the varying demands of different socio-economic groups while formulating transportation policies so as to hamper neither the goal of sustainability nor the goal of women empowerment.
Using census data of non-agricultural workers for 2011, this study aims to examine trends and determinants of travel behaviour in India. Descriptive statistics accompanied by a beta regression model of proportional outcomes are implemented on the obtained data. The study finds that men are the dominant users of motorized transport in the country. Most workers travel a short distance of less than 5 km, irrespective of area or gender. Population density, the share of married population and the share of rural population in a district significantly influence the share of environmentally sustainable travel behaviour displayed by that region. To the best of our comprehension, this is one of the primary studies elucidating the comparison of travel behaviour in rural–urban areas of Indian states. Not many studies in India have addressed the issue of influence of socio-demographic factors on environmentally sustainable travel choices. With this analysis, policymakers in the transportation sector can get a clearer idea of the behaviour and demands of different divisions of society. The findings of this study demand the evolution of infrastructure of public transportation and non-motorized transportation in the country in such a way that is both efficient and secure to neither impede the goals of empowerment or sustainability.
The low-carbon transition requires policies and behaviour changes that affect people's consumption habits. However, the impacts of the transition are likely to be experienced unevenly by consumers. Failing to account for these differences puts at risk the prospects of a just transition. This paper investigates the demand-side aspects of a just low-carbon transition, with a focus on the transport and food sectors in Sweden. It combines footprint analysis and sociodemographic and geographic analysis with an assessment of the distributional impacts of low-carbon transition policies from the perspectives of wealth, access, and health. The study finds variations in carbon footprint categories between those with higher or lower income and living in higher or lower density areas. It also finds varying degrees of ability to cope with the required shifts in the food and transport sectors. About 40 % of the Swedish population appears to be at higher risk from the adverse impacts on wealth and access related to policies aiming at low-carbon transition, because this cohort depends heavily on cars and is less able to cope with the increased price of carbon-intensive goods that these policies are expected to entail. The study also finds that, collectively, those most at risk of losing are responsible for 41 % of consumption-based emissions. The paper goes on to discuss implications for low-carbon transition policy measures and transitional assistance policy. Overall, it highlights the need for targeted, well-planned policies for emissions reductions and transitional assistance to support a fair low-carbon transition for all.
L’objectif de cette étude est de réaliser une revue de la littérature sur les effets qu’il faut attendre de la mise en oeuvre d’une mesure de gratuité généralisée des transports en commun sur la pression automobile dans l’agglomération parisienne. Pour répondre à cette question, nous avons croisé les regards que l’économie et la sociologie ont pu porter sur le sujet. Nous avons commencé par revenir sur les raisons pour lesquelles il est important d’inciter à l’utilisation des transports en commun. Premièrement, nous soulignons l’importance de réduire la pression automobile dans les villes en discutant les principales externalités qu’elle génère. Deuxièmement, nous présentons l’incidence de l’utilisation des transports en commun sur ces externalités. Nous mettons en évidence que l’utilisation des transports en commun réduit la congestion et la pollution de l’air, augmente l’activité économique et peut atténuer les décalages spatiaux. Nous avons ensuite réalisé une méta-analyse de la littérature traitant de la gratuité des transports en commun. Nous avons listé, de manière systématique, les articles sur le sujet, ce qui nous a permis d’identifier quelques 478 articles. Parmi ces articles, seuls 10 articles scientifiques traitent de la gratuité totale et 17 de la gratuité partielle. Cette démarche nous a aussi permis d’identifier 23 rapports (non-scientifiques) sur les politiques de tarification des transports que nous avons classés comme de la littérature « grise ». Ces travaux sont essentiellement mobilisés pour la dernière partie du rapport, afin rendre compte des effets observés des expériences de gratuité menées dans d’autres villes à travers le monde. Le principal enseignement de cette méta-analyse est l’absence de cadre de réflexion cohérent et unifié sur cette question. Nous sommes donc revenus sur les enseignements qui découlent des théories établies de l’économie des transports. Cette littérature ne traite généralement pas directement de la question de la gratuité des transports, mais permet d’étudier les effets d’une telle politique dans un cadre d’analyse cohérent et bien établi.
An evidence-based policy debate about future fuel demand requires reliable estimates for fuel price elasticities. Such predictions are often based on revealed preference (RP) data. However, this procedure will only yield reliable results in the absence of severe structural discontinuities. In order to overcome this potential limitation we used a situational stated preference (SP) survey to estimate the response to hypothetical fuel price changes beyond the scope of previous observations. We elicit fuel price elasticities for price increases up to four Euros per liter and find that the situational approach predicts the actual responses to previously observed fuel price changes very well. We conclude that applying a situational approach is particularly useful, if behavioral predictions for unprecedented (non-monetary) policy interventions or supply side shocks are of interest that go beyond the reach of standard RP approaches.
http://www.sciencedirect.com/science/article/pii/S096585641630636X
The level of public transport use in the area of large cities is representative of the degree of sustainable mobility behavior. This article, based on a population survey of mobility in the Community of Madrid are and the approach of a set of hypotheses combining alternatives and modes of transportation in the framework of four different mobility scenarios, shows that, although the public transport system is currently perceived as sufficiently developed and accessible, is not capable of promoting an effective modal shift, mainly due to lower competitiveness and efficiency offered regarding the car. However, the existence of a favorable predisposition of Madrid society to accept measures aimed at improving sustainability in transportation can be a key factor in the modal shift in favor of more sustainable modes of transport.
Fuel taxation policy in Chile has always been to keep taxes on diesel lower than those on gasoline. The proportion of automobiles with diesel engines has grown considerably as a result. Just 20% of diesel engine emissions are equivalent to 80% of gasoline engine emissions, and this affects the level of externalities associated with automobile use, especially in cities such as Santiago where pollution levels are high. This study estimates the effect of the fuel tax differential on automobile demand.
The findings indicate diesel automobile demand elasticities of -3.4 and 2.1 with respect to the price of the vehicle and the tax differential. The scale of these effects means there is scope for substantial emissions cuts by way of tax changes to equalize gasoline and diesel tax rates and create a specific tax on diesel automobiles.
Public transport policy in the Madrid Metropolitan Area is often deemed as a success. In 1985, an important reform was carried out in order to create a new administrative authority to coordinate all public transport modes and establish a single fare for all of them. This reform prompted a huge growth in public transport usage, even though it reduced the funding coverage ratio of the transport system. Since then, Madrid’s public transport system has been undergoing an increasing level of subsidization, which might jeopardize the financial viability of the city public transport system in the future. In this paper, we present a detailed analysis of the evolution of the public transport funding policy in Madrid in recent years. We found that the increasing level of subsidy can hardly be explained on the basis of equity issues. Moreover, we claim that there is still room for a funding policy that makes the efficiency of the system compatible with its financial sustainability.
This paper assesses the regressive effects of gasoline taxation in the United Kingdom. When all households are considered, middle-income households suffer most of the burden. When only car-owning households are considered, gasoline taxation is strongly regressive. Low-income households that own a car are more severely affected than high-income households because they spend a larger proportion of their income on motoring. This conclusion is similar to that of previous studies on the topic.
Environmental taxes have been introduced in many countries. However, few countries have reached the level of environmental taxation that is seen in Denmark today. This paper analyses the individual taxes as well as the combination of all these taxes and duties related to environmental concerns, including taxes on heating, transport fuels, electricity, water, waste, plastic bags, registration of cars, annual car use and pesticides.
The distributional effect of taxes is examined in relation to household income, socio-economic class, residential location and family status. The shifting of the tax structure from high marginal income tax to consumption-based taxes, especially environmental taxes, might have distributional impacts that have not been considered part of the tax policy.
The results suggest that in Denmark taxes on petrol and registration duties for cars are progressive, whereas most other environmental taxes are regressive, especially the green taxes on water, retail containers and CO2 emissions.
The authors apply nonparametric regression models to estimation of demand curves of the type most often used in applied research. From the demand curve estimators they derive estimates of exact consumers surplus and deadweight loss. The authors also develop tests of the symmetry and downward sloping properties of compensated demand. They work out asymptotic normal sampling theory for kernel and series nonparametric estimators as well as for the parametric case. The paper includes an application to gasoline demand that estimates the shape of the demand curve and the average magnitude of welfare loss from a tax on gasoline. Copyright 1995 by The Econometric Society.
Urban sprawl is a major challenge on the way to sustainable land use as highlighted by the International Year of Soils 2015. Because of increasing awareness of this threat in Europe, there is an urgent need to monitor urban sprawl and to guide European policy development. We found considerable sprawl in Europe at three scales with highly affected regions in the centre and along the Mediterranean coast using recently available consistent data across Europe from the European Copernicus programme. Based on our results, we propose a European de-sprawling strategy, including the implementation of targets and limits, and a set of concrete measures to control urban sprawl and to use land in a more resource-efficient way.
This paper deals with the estimation of unequally spaced panel data regression models with AR(1) remainder disturbances. A feasible generalized least squares (GLS) procedure is proposed as a weighted least squares that can handle a wide range of unequally spaced panel data patterns. This procedure is simple to compute and provides natural estimates of the serial correlation and variance components parameters. The paper also provides a locally best invariant test for zero first-order serial correlation against positive or negative serial correlation in case of unequally spaced panel data.
This paper analyzes the distributional incidence of the excise tax on gasoline in Chile using Household Budget Surveys. The incidence is calculated with respect to both income and expenditure distributions in order to consider the potential differences between transitory and permanent income. The Suits Index is estimated as a measure of the degree of progressivity of the tax, and confidence intervals are calculated using a bootstrap methodology to statistically compare changes in the incidence given changes in the tax. The results show that the tax, contrary to the evidence for several developed countries, is slightly or moderately progressive, with a lower degree of progressivity observed in the calculations based on income than those based on expenditure. The simulation of the 25% reduction in the tax rate implemented in 2008 shows that, in terms of incidence, its effect is to reduce the progressivity of the gasoline tax, which is the opposite of what was sought by the government with this policy.
Available until August 5 at: http://authors.elsevier.com/a/1RCvq14YGgL56f
In the last decades, the process of land-use intensification linked to human activity has changed considerably causing important modifications in the traditional dichotomized urban–rural relationships. Given their more complex dynamics, alternative methodologies for analysing the spatial consequences of changes are required. The present study investigates the variables shaping the urban–rural relationship in Spain over the last 20 years using a synthesizing methodology based on statistical and cartographic techniques that take into account a large number of variables and cases. The study was carried out at the level of local municipalities (nearly 8000 spatial units), fitting 36 socioeconomic and geographical indicators into a multivariate statistical framework. Indicators were selected to describe processes of intensification, extensification, or abandonment implying both land-use changes and important transformations in the local socioeconomic structure. Multivariate analysis identified seven processes contributing to the change in the urban–rural relationship in Spain: urban intensification and sprawl, coastalization, naturbanization, expansion of irrigated crop systems, livestock and pasture expansion, afforestation and reforestation, and depopulation. An in-depth understanding of recent spatial dynamics in Mediterranean countries may inform sustainable land management with the final aim to mitigate or re-balance the impact of these processes in land degradation or in an excessive human pressure along the coastal rim between other undesirable consequences.
This article provides an overview of trends in demand for urban transport, considers their implications for the achievement of a set of urban transport policy objectives, and summarizes the principal problems which are likely to arise. It notes in particular the challenge of meeting climate change goals, which is likely to dominate the development of urban transport policy over the next four decades. It considers the range of policy instruments available, and summarizes evidence on their effectiveness. On this basis it argues that a package of policy instruments is needed, and provides evidence of good practice in the design of such packages. It reviews the barriers to the design and implementation of such packages, and summarizes international guidance on ways of overcoming these barriers. Finally, in a concluding section, it identifies the principal areas in which innovations are needed in urban transport policy and, in its role in providing the context for a special issue on modeling, suggests the resulting requirements for model development.
This paper1 takes as its starting point the observation that fuel prices – and thus taxes – are important for good management of climate change and other environmental problems. To economists this should be no surprise yet it seems that the role of fuel taxation as an instrument of climate policy has not been fully appreciated. It is however one of the few policy instruments that, since several decades, has actually reduced fuel consumption appreciably. Thanks to taxation (mainly in Europe and Japan), carbon emissions are considerably lower than they would have been otherwise. In future where carbon emissions are to be cut drastically, this instrument will be crucial. There is however much opposition to the instrument. This opposition uses various arguments, for instance that fuel taxes hurt the poor since they are strongly regressive. We however find that the choice of country and methodology turns out to be of great consequence. We study seven European countries—France, Germany, United Kingdom, Italy, Serbia, Spain and Sweden and do find some evidence of regressivity but the evidence is very weak. It does not apply when lifetime income is used and it does not apply to the poorest country in the group. The best one-line summary is probably that the tax is approximately proportional.
This paper explores the relationship between land-use patterns and individual mobility from a comparative international perspective. There is a vast literature on US automobile dependence. Major explanatory factors include: transport, housing, land-use and tax policy; per capita incomes; American cultural preferences; national geography; and the spatial structure of US metropolitan areas (itself a result of the first three factors). Emphasising the policy environment, many researchers have cast their analysis in comparative terms, noting the differences in automobile use between European countries and the US. It is argued that US patterns of metropolitan form, with low development densities and dispersed population and employment, reinforce vehicle dependence. In contrast, most European metropolitan areas, with higher densities and more centralised land-use patterns, have lower levels of car use. Stronger controls on land use employed in many European countries are seen as having preserved the compact form of metropolitan areas. These arguments imply significant relationships between land-use patterns and travel behaviour. Using travel diary data from the US and Great Britain, these relationships are compared across the two countries. It is found that differences in daily trips and miles travelled are explained by differences in both the urban form and household income. While the effect of income on daily travel is similar for the US and Great Britain, the effect of density is more pronounced in the US.
We discuss societal change issues in two parts: those related to household and population, and those related to the workplace. Among the former, we identify growth of the elderly population, foreign immigration, decline of the nuclear family, growing income disparities, and impacts of information technology on lifestyle as worthy of comparative research. We argue that workplace related changes, being driven by information and telecommunications technology and globalization, are particularly promising areas for research. These include various types of teleworking, increases in flexible forms of employment, and changing linkages between and among firms. Little is yet known about these changes, or about how they may affect location and travel patterns. These technology-induced changes will be mediated by political, social and cultural values, hence providing a rich area for international collaborative research.
The relationships between urban sprawl and journey to work in the metropolitan area of Madrid are analysed. Three elements of urban sprawl are addressed (metropolitan expansion, low-density and work and leisure facilities in suburban areas) and are related to the main characteristics of mobility (flow networks, mode-choice, and travel times). The conclusion reached is that the elements defining the new metropolitan morphology are related to an unsustainable mobility model, which increases commuter numbers, distances, and car use.
Previous work shows that policies that subsidize new vehicles and tax size, miles, or gasoline efficiently reduce pollution. Less is known about their distributional effects. This paper examines distributional effects by estimating the joint demand for vehicles and miles, using the Consumer Expenditure Survey. Greater price responsiveness among low-income households enhances progressivity of gas or miles taxes across lower incomes, and mitigates regressivity across upper incomes. Taxes on engine size or subsidies to new vehicles are significantly more regressive than gas or miles taxes.
In recent years, calls for carbon taxes as a policy tool to combat global warming have kept a discussion of the price and income elasticities of gasoline demand alive. To date, gasoline demand elasticity estimates are almost exclusively based on aggregate data that are subject to aggregation problems and make distributional concerns impossible to address. By using household-level data from the Panel Study of Income Dynamics (PSID) and imputed fuel efficiency measures and gasoline prices, I estimate household demand for gasoline and the corresponding price and income demand elasticities. An attempt is made to include data on the car stock in the estimation since car-portfolio and gasoline demand decisions are closely related. Empirical results from a selection corrected gasoline demand regression suggest low short-run price and income elasticities and clear differences in gasoline demand across the population. These results suggest that a gasoline tax is not likely to result in large decreases in gasoline consumption while potentially imposing hardship on identifiable segments of the population.
Estimation of the dynamic error components model is considered using two alternative linear estimators that are designed to improve the properties of the standard first-differenced GMM estimator. Both estimators require restrictions on the initial conditions process. Asymptotic efficiency comparisons and Monte Carlo simulations for the simple AR(1) model demonstrate the dramatic improvement in performance of the proposed estimators compared to the usual first-differenced GMM estimator, and compared to non-linear GMM. The importance of these results is illustrated in an application to the estimation of a labour demand model using company panel data.
The fuel demand literature provides a range of estimates of the long and short-run price and income elasticities of gasoline demand for different countries and states. These estimates can be very useful in predicting the overall impacts of policy approaches designed to reduce fuel consumption and to address concerns of carbon emissions or energy security. However, analysis of policy options based on elasticities that are homogenous across income groups provides no information about the relative distributional burden that may be faced by different sectors of the population. Different responses to the same change in price or income are likely to occur, dependent on both travel needs and income levels. This paper estimates gasoline demand elasticities for different income quintiles in the United States to test for heterogeneity in demand response. Group wise summary consumer expenditure data for 20 years is used to derive the elasticity estimates. The results show that the elasticities do vary across groups and follow a U-pattern from the lowest to the highest income quintile. The lowest income quintile is found to have the largest price elasticity. The lowest and the highest income quintiles appear to be statistically insensitive to any changes in income. The rebound effect also follows the U-pattern, with the highest rebound observed among the wealthiest households. Rural households appear to have lower price elasticity than households in urban areas.
This paper presents specification tests that are applicable after estimating a dynamic model from panel data by the generalized
method of moments (GMM), and studies the practical performance of these procedures using both generated and real data. Our
GMM estimator optimally exploits all the linear moment restrictions that follow from the assumption of no serial correlation
in the errors, in an equation which contains individual effects, lagged dependent variables and no strictly exogenous variables.
We propose a test of serial correlation based on the GMM residuals and compare this with Sargan tests of over-identifying
restrictions and Hausman specification tests.
A survey is made of the international research on the response of motorists to fuel price changes and an assessment of the orders of magnitude of the relevant income and price effects. The paper highlights some new results and directions that have appeared in the literature. The evidence shows important differences between the long- and short-run price elasticities of fuel consumption. © The London School of Economics and the University of Bath 2002
Although fuel taxes are a practical means of curbing vehicular air pollution, congestion, and accidents in developing countries--all of which are typically major problems--they are often opposed on distributional grounds. Yet few studies have investigated fuel tax incidence in a developing country context. We use household survey data and income-outcome coefficients to analyze fuel tax incidence in Costa Rica. We find that the effect of a 10% fuel price hike through direct spending on gasoline would be progressive, its effect through spending on diesel--both directly and via bus transportation--would be regressive (mainly because poorer households rely heavily on buses), and its effect through spending on goods other than fuel and bus transportation would be relatively small, albeit regressive. Finally, we find that the overall effect of a 10% fuel price hike through all types of direct and indirect spending would be neutral and the magnitude of this combined effect would be modest. We conclude that distributional concerns need not rule out using fuel taxes to address pressing public health and safety problems, particularly if gasoline and diesel taxes can be differentiated.
The majority of evidence on gasoline demand elasticities is derived from models based on national data. Since the largest growth in population is now taking place in cities in the developing world it is important that we understand whether this national evidence is applicable to demand conditions at the local level. The aim of this paper is to estimate and compare gasoline per vehicle demand elasticities at the national and local levels in Mexico. National elasticities with respect to price, income, vehicle stock and metro fares are estimated using both a time series cointegration model and a panel GMM model for Mexican states. Estimates for Mexico City are derived by modifying national estimates according to mode shares as suggested by Graham and Glaister (2006), and by estimating a panel Within Groups model with data aggregated by borough. Although all models agree on the sign of the elasticities the magnitudes differ greatly. Elasticities change over time and differ between the national and local levels, with smaller price responses in Mexico City. In general, price elasticities are smaller than those reported in the gasoline demand surveys, a pattern previously found in developing countries. The fact that income and vehicle stock elasticities increase over time may suggest that vehicles are being used more intensively in recent years and that Mexico City residents are purchasing larger vehicles. Elasticities with respect to metro fares are negligible, which suggests little substitution between modes. Finally, the fact that fuel efficiency elasticities are smaller than vehicle stock elasticities suggests that vehicle stock size, rather than its composition, has a larger impact on gasoline consumption in Mexico City.
Publicación ISI Email : basso@sauder.ubc.ca Many surveys have attempted to convey and synthesize the information of hundreds of studies on automobile fuel demand. In most cases, the focus has been placed in giving assessments of the most likely values of various elasticities, particularly price and income, while trying to explain the differences between results. However, given the summary characteristic of these surveys, the most popular approaches and methodologies-such as dynamic reduced-form demand models with time-series data-have dominated the core values obtained. The present survey focuses instead on the various approaches and methods that have been used. It reviews and classifies them, showing that there are relevant findings, raised by studies using less popular approaches, which seem to challenge some of the accepted core results in the literature. These other approaches include: co-integration techniques, use of disaggregate data at the household level and flexible functional forms, and structural models of automobile fuel consumption.
Drawing upon relevant literature, this article reviews research on socially sustainable urban transportation (SSUT). Arguing that the social dimensions of sustainability are more often implied rather than explicit, this article subsequently considers how urban transportation influences the achievement of social sustainability in urban regions. Socially sustainable urban transportation is implied in the literature through the elements of social equity, social exclusion, and quality of life. Several well-established research areas provide potential theoretical, methodological, and applied insight into the development of future socially sustainable urban transportation research agendas, including: urban form, location- and individual-based accessibility, and city/regional planning for sustainability.
Voluntary approaches have become a popular in the U.S. to enhance the efficacy and scope of existing regulations and to reduce emissions in sectors or for pollutants where formal environmental regulation is lacking. In this paper, we examine the effectiveness of a particular EPA voluntary program for the metal finishing industry, the Strategic Goals Program (SGP). The Strategic Goals Program is a good candidate for evaluation because it had a credible regulatory threat at the time the program was implemented, we can measure both baseline emissions and progress towards explicit environmental goals, and we have data for participants and non-participants. We look at the decision to participate in the SGP and also try to determine what effect, if any, this program has had on the pollution profile of facilities. In addition, we examine whether the voluntary program had any discernible impact on toxicity-weighted emissions. Finally, we explore the possibility that we have a bimodal distribution in the sample caused by the different motivations of facilities to join a voluntary program. A number of factors influence a firm’s decision to participate in SGP, including trade group membership. However, we do not find robust evidence that SGP participation has had a significant impact on emission reductions. This result continues to hold when we adjust emissions to account for toxicity. Our measure of the threat of regulation is correlated with emission reductions for both participants and non-participants.
Meta-analysis is used to determine if there are factors that systematically affect price and income elasticity estimates in studies of gasoline demand. Four econometric models are estimated, using long-run and short-run price and income elasticity estimates from previous studies as the dependent variables. Explanatory variables include functional form, lag structure, time span, national setting, estimation technique, and other features of the model structure. Elasticity estimates are found to be sensitive to the inclusion or exclusion of some measure of vehicle ownership. Static models appear to overestimate short-run elasticities, underestimate long-run price elasticities, but pick up the full long-run income responsiveness. There is variation in the elasticity of demand across countries, especially in the short-run, and gasoline demand appears to be getting more price-elastic and less income-elastic over time.
Continuing rapid growth in U.S. gasoline consumption threatens to exacerbate environmental and congestion problems. We use flexible semiparametric and nonparametric methods to guide analysis of household gasoline consumption, and including this variable cuts the estimated income elasticity in half. Slower projected future growth in licensed drivers points to slower growth in gasoline consumption. A parsimonious representation of age, income, lifecycle and location effects is developed and tested. We show how flexible methods also helped reveal fundamental problems with the available price data.
Automobile gasoline demand can be expressed as a multiplicative function of fuel efficiency, mileage per car and car ownership. This implies a linear relationship between the price elasticity of total fuel demand and the price elasticities of fuel efficiency, mileage per car and car ownership. In this meta-analytical study we aim to investigate and explain the variation in empirical estimates of the price elasticity of gasoline demand. A methodological novelty is that we use the linear relationship between the elasticities to develop a meta-analytical estimation approach based on a Seemingly Unrelated Regression (SUR) model with Cross Equation Restrictions. This approach enables us to combine observations of different elasticities and thus increase our sample size. Furthermore, it allows for a more detailed interpretation of our meta-regression results. The empirical results of the study demonstrate that the SUR approach leads to more precise results (i.e., lower standard errors) than a standard meta-analytical approach. We find that, with mean short run and long run price elasticities of - 0.34 and - 0.84, respectively, the demand for gasoline is not very price sensitive. Both in the short and the long run, the impact of a change in the gasoline price on demand is mainly driven by responses in fuel efficiency and mileage per car and to a slightly lesser degree by changes in car ownership. Furthermore, we find that study characteristics relating to the geographic area studied, the year of the study, the type of data used, the time horizon and the functional specification of the demand equation have a significant impact on the estimated value of the price elasticity of gasoline demand.