Vehicle miles traveled induced demand, rebound effect, and price and income elasticities: A US spatial econometric analysis

Jamal Mamkhezri and Mohsen Khezri

Transport Policy, 2024, vol. 158, issue C, 224-240

Abstract: The economic literature on transportation is extensive, with travel demand being a well-studied topic. However, research on light-duty vehicle travel has not fully explored spatial dependencies arising from neighboring regions' driving activities. This study uses state-level panel data from 2000 to 2019 to examine U.S. vehicle miles traveled (VMT), focusing on spatial spillover effects through a Spatial Durbin Model. Our results reveal significant spatial interactions between states. Increased VMT in one state leads to spillover effects, increasing VMT in neighboring states. We present our findings as marginal effects, distinguishing between direct and indirect impacts. The direct price elasticity is estimated at −0.257, with a positive spillover impact of 0.036, yielding a total elasticity of −0.221. Induced travel exhibits a larger indirect effect than a direct effect, resulting in an overall impact of 0.276. Additionally, direct and total income elasticities are 0.194 and 0.146, respectively, while direct and total fuel economy rebound effects are 0.546 and 0.496, respectively. Moreover, higher numbers of licensed drivers, registered vehicles, and urbanization significantly influence a state's VMT. This research highlights the importance of regional planning among states, especially considering transportation infrastructure and environmental concerns related to driving and vehicle emissions.

Keywords: Vehicle miles traveled; Fuel price elasticity; Rebound effect; Induced travel effect; Spatial panel analysis (search for similar items in EconPapers)
JEL-codes: Q41 R48 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1016/j.tranpol.2024.09.023

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