Author: Meghan R. Busse
Publisher:
ISBN:
Category : Automobiles
Languages : en
Pages : 40
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Book Description
The dramatic increase in gasoline prices from close to $1 in 1999 to $4 at their peak in 2008 made it much more expensive for consumers to operate an automobile. In this paper we investigate whether consumers have adjusted to gasoline price changes by altering what automobiles they purchase and what prices they pay. We investigate these effects in both new and used car markets. We find that a $1 increase in gasoline price changes the market shares of the most and least fuel-efficient quartiles of new cars by +20% and -24%, respectively. In contrast, the same gasoline price increase changes the market shares of the most and least fuel-efficient quartiles of used cars by only +3% and -7%, respectively. We find that changes in gasoline prices also change the relative prices of cars in the most fuel-efficient quartile and cars in the least fuel-efficient quartile: for new cars the relative price increase for fuel-efficient cars is $363 for a $1 increase in gas prices; for used cars it is $2839. Hence the adjustment of equilibrium market shares and prices in response to changes in usage cost varies dramatically between new and used markets. In the new car market, the adjustment is primarily in market shares, while in the used car market, the adjustment is primarily in prices. We argue that the difference in how gasoline costs affect new and used automobile markets can be explained by differences in the supply characteristics of new and used cars.
Author: Kenneth Thomas Gillingham
Publisher: Stanford University
ISBN:
Category :
Languages : en
Pages : 298
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Book Description
When gasoline prices rise, people notice: the news is filled with reports of pinched household budgets and politicians feeling pressure to do something to ameliorate the burden. Yet, raising the gasoline tax to internalize externalities is widely considered by economists to be among the most economic efficiency-improving policies we could implement in the transportation sector. This dissertation brings new evidence to bear on quantifying the responsiveness to changing gasoline prices, both on the intensive margin (i.e., how much to drive) and the extensive margin (i.e., what vehicles to buy). I assemble a unique and extremely rich vehicle-level dataset that includes all new vehicle registrations in California 2001 to 2009, and all of the mandatory smog check program odometer readings for 2002 to 2009. The full dataset exceeds 49 million observations. Using this dataset, I quantify the responsiveness to gasoline price changes on both margins, as well as the heterogeneity in the responsiveness. I develop a novel structural model of vehicle choice and subsequent utilization, where consumer decisions are modeled in a dynamic setting that explicitly accounts for selection on unobserved driving preference at both the time of purchase and the time of driving. This utility-consistent model allows for the analysis of the welfare implications to consumers and government of a variety of different policies, including gasoline taxes and feebates. I find that consumers are responsive to changing gasoline prices in both vehicle choice and driving decisions, with more responsiveness than in many recent studies in the literature. I estimate a medium-run (i.e., roughly two-year) elasticity of fuel economy with respect to the price of gasoline for new vehicles around 0.1 for California, a response that varies by whether the vehicle manufacturer faces a tightly binding fuel economy standard. I estimate a medium-run elasticity of driving with respect to the price of gasoline around -0.15 for new personal vehicles in the first six years. Older vehicles are driven much less, but tend to be more responsive, with an elasticity of roughly -0.3. I find that the vehicle-level responsiveness in driving to gasoline price changes varies by vehicle class, income, geographic, and demographic groups. I also find that not including controls for economic conditions and not accounting for selection into different types of new vehicles based on unobserved driving preference tend to bias the elasticity of driving away from zero -- implying a greater responsiveness than the true responsiveness. This is an important methodological point, for much of the literature estimating similar elasticities ignores these two issues. These results have significant policy implications for policies to reduce gasoline consumption and greenhouse gas emissions from transportation. The relatively inelastic estimated responsiveness on both margins suggests that a gasoline tax policy may not lead to dramatic reductions in carbon dioxide emissions, but is a relatively non-distortionary policy instrument to raise revenue. When the externalities of driving are considered, an increased gasoline tax may not only be relatively non-distortionary, but even economic efficiency-improving. However, I find that the welfare changes from an increased gasoline tax vary significantly across counties in California, an important consideration for the political feasibility of the policy. Finally, I find suggestive evidence that the ``rebound effect'' of a policy that works only on the extensive margin, such as a feebate or CAFE standards, may be closer to zero than the elasticity of driving with respect to the price of gasoline. This suggestive finding is particularly important for the analysis of the welfare effects of any policy that focuses entirely on the extensive margin.
Author: David Austin
Publisher: Government Printing Office
ISBN:
Category : Business & Economics
Languages : en
Pages : 60
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Book Description
Gasoline prices and driving behavior. Volume of traffic ; Speed of traffic ; Applicability of findings to other regions of the United States -- Gasoline prices and vehicle markets. Market shares for cars and light trucks ; Gasoline prices and vehicle market status ; Changes in new vehicle fuel economy and pricing ; Changes in the used vehicle market -- Study data -- Analytical approach and economic results.
Author: Eduardo Porter
Publisher: Penguin
ISBN: 1101444517
Category : Business & Economics
Languages : en
Pages : 280
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Book Description
Everything has a price, but it isn't always obvious what that price is. Many of the prices we pay seem to make little sense. We shell out $2.29 for a coffee at Starbucks when a nearly identical brew can be had at the corner deli for less than a dollar. We may be less willing to give blood for $25 than to donate it for free. Americans hire cheap illegal immigrants to fix the roof or mow the lawn, and vote for politicians who promise to spend billions to keep them out of the country. And citizens of the industrialized West pay hundreds of dollars a year in taxes or cash for someone to cart away trash that would be a valuable commodity in poorer parts of the world. The Price of Everything starts with a simple premise: there is a price behind each choice that we make, whether we're deciding to have a baby, drive a car, or buy a book. We often fail to appreciate just how critical prices are as a motivating force shaping our lives. But their power becomes clear when distorted prices steer our decisions the wrong way. Eduardo Porter uncovers the true story behind the prices we pay and reveals what those prices are actually telling us. He takes us on a global economic adventure, from comparing the relative price of a vote in corrupt São Tomé and in the ostensibly uncorrupt United States, to assessing the cost of happiness in Bhutan, to deducing the dollar value we assign to human life. His unique approach helps explain: * Why polygamous societies actually place a higher value on women than monogamous ones. * Why someone may find more value in a $14 million license plate than the standard issue, $95 one. * Why some government agencies believe one year of life for a senior citizen is four times more valuable than that of a younger person. Porter weaves together the constant-and often unconscious-cost and value assessments we all make every day. While exploring the fascinating story behind the price of everything from marriage and death to mattresses and horsemeat, Porter draws unexpected connections that bridge a wide range of disciplines and cultures. The result is a cogent and insightful narrative about how the world really works. Watch a Video
Author: Michael Levi
Publisher: Oxford University Press, USA
ISBN: 0199986169
Category : Business & Economics
Languages : en
Pages : 268
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Book Description
Looks at the clash between gas/oil proponents and supports of alternative energies and offers a plan for the future that combines the best of both worlds.
Author: Don Fullerton
Publisher: University of Chicago Press
ISBN: 0226921980
Category : Business & Economics
Languages : en
Pages : 345
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Book Description
Economic research on climate change has been crucial in advancing our understanding of the consequences associated with global warming as well as the costs and benefits of the various policies that might reduce emissions of greenhouse gases. As nations work to develop climate policies, economic insights into their design and implementation are ever more important. With a balance between theoretical and empirical approaches, The Design and Implementation of US Climate Policy looks at the possible effects of various climate policies on a range of economic outcomes. The studies that comprise the volume examine topics that include the coordination—or lack thereof—between the federal and state governments, implications of monitoring and enforcing climate policy, and the specific consequences of various climate policies for the agricultural, automotive, and buildings sectors.
Author:
Publisher: Newnes
ISBN: 0123918979
Category : Science
Languages : en
Pages : 729
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Book Description
Climate Vulnerability, Volume 3
Author: Tooraj Jamasb
Publisher: Cambridge University Press
ISBN: 1107008506
Category : Business & Economics
Languages : en
Pages : 507
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Book Description
This book is a comprehensive and analytical perspective on the future of electricity demand in a low-carbon world.
Author:
Publisher:
ISBN:
Category : Economic policy
Languages : en
Pages : 898
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Book Description
Author: International Transport Forum
Publisher: OECD Publishing
ISBN: 9282102971
Category :
Languages : en
Pages : 166
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Book Description
This report reviews the rationale and measures for government intervention to improve fuel economy and reduce CO2 emissions from new vehicles.
