Effect of gasoline prices on car fuel efficiency: Evidence from Lebanon

Walid Marrouch () and Jana Mourad

Energy Policy, 2019, vol. 135, issue C

Abstract: This paper explores how gasoline prices affect the sales of new and used cars in Lebanon. Using a rich dataset on monthly imported cars from 2000 to 2016, a vector autoregressive analysis is used to model different consumer choices between fuel-efficient cars, midsize cars, and fuel-inefficient cars. We report the first empirical evidence on this question from the Middle East and North Africa (MENA) region using individual automobile data. We use within sample and out-of-sample tests to examine whether gasoline prices influence the sale of fuel-efficient cars. Our results show evidence against the hypothesis that rising gasoline prices shift consumers’ demand toward the most fuel-efficient cars.

Keywords: Gasoline prices; Automobiles; Consumer choice; Fuel efficiency; Imports; Lebanon (search for similar items in EconPapers)
JEL-codes: C32 L62 R40 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:135:y:2019:i:c:s0301421519305889

DOI: 10.1016/j.enpol.2019.111001

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