Driving Behavior and the Price of Gasoline: Evidence from Fueling-Level Micro Data

Christopher Knittel and Shinsuke Tanaka

No 26488, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use novel microdata on on-road fuel consumption and prices paid for fuel in Japan to estimate short-run price elasticities of demand for gasoline consumption. We have three main findings. First, our elasticity estimates of roughly -0.37 are in orders of magnitude larger than previously estimated using more aggregate data. Second, we are one of the first papers to separately estimate both the price elasticities of miles driven (-0.30) and on-road fuel economy (0.07). Lastly, we find that on-road fuel economy is determined by recent prices than distant past prices paid, suggesting limited habit formation of fuel-conserving driving behaviors.

JEL-codes: D12 L71 Q31 Q41 R48 (search for similar items in EconPapers)
Date: 2019-11
New Economics Papers: this item is included in nep-ene, nep-tre and nep-ure
Note: EEE IO
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Citations: View citations in EconPapers (13)

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