Journal
ENERGY ECONOMICS
Volume 68, Issue -, Pages 454-465Publisher
ELSEVIER
DOI: 10.1016/j.eneco.2017.10.026
Keywords
Gasoline demand; Vehicle choice; Elasticity
Categories
Funding
- Social Sciences and Humanities Research Council of Canada
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Using data on all new vehicles registered in Canada from 2000 to 2010, we estimate the elasticity of the fuel economy of the new vehicle stock with respect to gasoline price. We find that a 10% increase in gasoline price causes a 0.8% improvement in the fuel economy of new vehicles. However, we also show that consumers respond much more strongly to fuel taxes than to other components of the gasoline price. Finally, we provide evidence that consumers in dense urban areas are more responsive to changes in fuel prices than consumers living on the urban periphery. (C) 2017 Elsevier B.V. All rights reserved.
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