Fuel prices as a driver of sustainable mobility: Impacts on traffic volume and vehicle choice

Adhurim Haxhimusa and Mario Liebensteiner

Energy Economics, 2025, vol. 148, issue C

Abstract: This study examines the effect of fuel price changes on traffic volume and newly registered cars across European countries, with a particular focus on the shift toward sustainable mobility. As transportation remains heavily dependent on fossil fuels, modern economies are increasingly challenged to reduce the negative externalities associated with road traffic. Using monthly traffic data from counting stations in Switzerland, Germany, and Austria (2010–2019) and annual data on new car registrations (2000−2022) from 17 European countries, we estimate the impact of fuel prices on mobility patterns. On the intensive margin, we find a relatively inelastic response of car traffic to monthly fuel prices of −0.086, which is on the lower end compared with previous studies. On the extensive margin, higher fuel prices significantly reduce purchases of conventional diesel and gasoline cars and spur the adoption of greener electric and hybrid vehicles. The relatively low elasticity of traffic demand suggests that complementary policies, such as improved public transportation, may be necessary to enhance environmental outcomes in the countries studied. This study provides fresh insights into the effects of fuel prices on transportation patterns and contributes to the design of sustainable mobility policies.

Keywords: Fuel prices; Traffic; E-mobility; Sustainable mobility; Environmental policy; Energy transition; Carbon pricing (search for similar items in EconPapers)
JEL-codes: L9 Q4 Q5 R4 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:148:y:2025:i:c:s014098832500444x

DOI: 10.1016/j.eneco.2025.108617

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