The Effects of Higher Gasoline Prices on U.S. Light Vehicle Sales, Prices, and Variable Profit by Segment and Manufacturer Group, 2001 and 2004

Walter McManus

Industrial Organization from University Library of Munich, Germany

Abstract: The rising gasoline prices of the past few years were not associated with shifts from vehicles with lower MPG to vehicles with higher MPG. This has been seen as evidence that gasoline prices have little impact on the purchase choices of new-vehicle buyers. However, this paper presents new evidence that the shifts toward vehicles with higher MPG that the rising price of gasoline would have caused were not observed because they were offset by price cuts that were disproportionately applied to vehicles with lower MPG.

Keywords: fuel economy; gasoline prices; automobile demand; nested multinomial logit; variable profit (search for similar items in EconPapers)
JEL-codes: L62 (search for similar items in EconPapers)
Pages: 13 pages
Date: 2005-05-25
New Economics Papers: this item is included in nep-bec, nep-dcm and nep-ene
Note: Type of Document - pdf; pages: 13. pdf
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0505010

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