Hidden regimes and the demand for carbon dioxide from motor-gasoline

Travis Roach

Energy Economics, 2015, vol. 52, issue PB, 306-315

Abstract: Perhaps the most tactile source of anthropogenic carbon dioxide (CO2) emissions stem from vehicle-use. Because consumers are well aware of their price and quantity decisions it is likely that consumer demand for CO2 emissions from motor-gasoline are quite responsive to the overall state of the economy. Using a structurally identified Markov-switching demand model I find that CO2 emissions respond asymmetrically to changes in income and the price of gasoline in expansionary and contracting states of the economy. The findings of this paper indicate that flexible policy instruments have the potential to mitigate undue burden on consumers and producers compared to their static counterparts.

Keywords: Carbon dioxide; Markov switching; Motor-gasoline (search for similar items in EconPapers)
JEL-codes: C51 Q41 Q43 Q53 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:52:y:2015:i:pb:p:306-315

DOI: 10.1016/j.eneco.2015.09.014

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