 How responsive is Saudi new vehicle fleet fuel economy to fuel-and vehicle-price policy levers?Tamara Sheldon and Rubal Dua Energy Economics, 2021, vol. 97, issue C Abstract: This paper investigates the drivers of recent improvements in Saudi Arabia's fleet fuel economy for new vehicles including passenger cars and light-duty trucks. Vehicle choice models are estimated using both aggregate new vehicle sales data and disaggregate new vehicle buyer survey data. The estimated models are used to simulate counterfactual policy scenarios. Simulation results suggest that the Saudi gasoline price elasticity of demand for new vehicle fuel economy decreased slightly over recent years, but it is still more elastic than that of the United States. Moreover, the increase in domestic gasoline prices between 2014 and 2016 accounted for 42% of the increase in estimated new vehicle fleet fuel economy over that period. Finally, the estimated elasticities, and thus policy sensitivities, vary by income and household size. A revenue-neutral household income- and size-based feebate policy could be more progressive than a gasoline price increase for improving the new vehicle fleet fuel economy. Keywords: Fleet fuel economy; Fuel price; Vehicle feebate (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:97:y:2021:i:c:s0140988320303662 DOI: 10.1016/j.eneco.2020.105026 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
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