Small Cars, Large Cars, and the Price of Gasoline

Blomqvist, Åke; Haessel, Walter

doi:10.2307/134317

Cited by 22 publications

(6 citation statements)

References 7 publications

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“…There is a very large literature (reaching back almost half a century) that has investigated the effect of gasoline prices on car choices, the car industry, or vehicle miles traveled, and that has estimated the elasticity of demand for gasoline. In addition to the papers described in detail in the next section, other related papers includeBlomqvist and Haessel (1978),Carlson (1978),Ohta and Griliches (1986),Greenlees (1980),Sawhill (2008),Tishler (1982), andWest (2007).…”

mentioning

confidence: 99%

Are Consumers Myopic? Evidence from New and Used Car Purchases

Busse

Knittel

Zettelmeyer

2013

American Economic Review

385

308

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We investigate whether car buyers are myopic about future fuel costs. We estimate the effect of gasoline prices on short-run equilibrium prices of cars of different fuel economies. We then compare the implied changes in willingness-to-pay to the associated changes in expected future gasoline costs for cars of different fuel economies in order to calculate implicit discount rates. Using different assumptions about annual mileage, survival rates, and demand elasticities, we calculate a range of implicit discount rates similar to the range of interest rates paid by car buyers who borrow. We interpret this as showing little evidence of consumer myopia. (JEL D12, H25, L11, L62, L71, L81)

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mentioning

confidence: 99%

Are Consumers Myopic? Evidence from New and Used Car Purchases

Busse

Knittel

Zettelmeyer

2013

American Economic Review

385

308

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show abstract

“…In the same way, Blomqvist and Haessel (1978) show for Canada that the short-term price elasticity of new car demand is fairly high. This is part of a more global problem, the question of equipment (machinery, fittings, cars, etc.…”

mentioning

confidence: 72%

“…This implies that even if people choose more fuel-efficient vehicles for a given size, this is offset by an increase in the size of the vehicles on the road. This effect is even stronger if we consider, using the findings of Blomqvist and Haessel (1978), that price elasticity of demand Cars and Environment in Switzerland: What Kind of Taxes? 93 is higher for small cars than for large ones: even if price increases were the same for all cars, demand for small cars would fall more than demand for large cars.…”

Section: A Tax Internalizing External Costs (Pigovian Solution)mentioning

confidence: 99%

Environmental Policy Between Regulation and Market

Jeanrenaud¹

1997

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“…These studies are not, however, sufficiently disaggregated and so it is difficult to provide policy advice using models from the top-down perspective. Blomqvist and Haessel (1978) estimate how much gasoline demand can be mitigated by stimulating sales of fuel efficient cars. Bonilla (2009) estimates aggregate fuel economy (by fuel type for on road cars) for the British experience.…”

Section: Gasoline Demand Model: a Review Of Studiesmentioning

confidence: 99%

Demand for mini cars and large cars; decay effects, and gasoline demand in Japan

2012

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Explaining a) why consumers underinvest in new car fuel economy by opting to buy large vehicles, b) why macro shifts in vehicle classes have occurred in the last decades and how c) the effects of vehicle fuel economy and shifts in vehicle mix influence the growth path of gasoline demand is key to design effective energy efficiency goals for transport. As of 2008, 1.9 EXJ (Exajoules) of energy are consumed in Japan by private vehicles producing 124 MtCO2 emissions. For the period 1980 to 2008, we estimate (1) gasoline demand for three vehicle sizes, (2) vehicle sales (3) new car fuel economy changes (the 'real' technical change), and (4) vehicle stocks. Using a data sample for 1980-2008 we find that a) in the short run consumers buy fuel economy, that is sales of mini and small cars increase, but fail to do so in the long run and (b) consumers are increasingly trading in their cars for larger cars. A further finding is that gasoline demand is projected to increase to 2.3 Exajoules by 2035 even with strong penetration of mini cars. The policy implication is clear: Japan's policy to reduce oil dependency to 80 % by 2030 is in peril so long as buyers prefer larger cars and drive ever longer distances.

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Small Cars, Large Cars, and the Price of Gasoline

Cited by 22 publications

References 7 publications

Are Consumers Myopic? Evidence from New and Used Car Purchases

Are Consumers Myopic? Evidence from New and Used Car Purchases

Environmental Policy Between Regulation and Market

Demand for mini cars and large cars; decay effects, and gasoline demand in Japan

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