Oil Price Uncertainty, Transport Fuel Demand and Public Health

Ling-Yun He, Sheng Yang and Dongfeng Chang
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Sheng Yang: Huaxia Bank and Renmin University of China Joint Postdoctoral Research Station, Beijing 100005, China
Dongfeng Chang: School of Economics, Shandong University, Jinan 250100, China

IJERPH, 2017, vol. 14, issue 3, 1-19

Abstract: Based on the panel data of 306 cities in China from 2002 to 2012, this paper investigates China’s road transport fuel (i.e., gasoline and diesel) demand system by using the Almost Ideal Demand System (AIDS) and the Quadratic AIDS (QUAIDS) models. The results indicate that own-priceelasticitiesfordifferentvehiclecategoriesrangefrom?1.215to?0.459(byAIDS)andfrom ?1.399 to?0.369 (by QUAIDS). Then, this study estimates the air pollution emissions (CO, NOx and PM2.5) and public health damages from the road transport sector under different oil price shocks. Compared to the base year 2012, results show that a fuel price rise of 30% can avoid 1,147,270 tonnes of pollution emissions; besides, premature deaths and economic losses decrease by 16,149 cases and 13,817.953 million RMB yuan respectively; while based on the non-linear health effect model, the premature deaths and total economic losses decrease by 15,534 and 13,291.4 million RMB yuan respectively. Our study combines the fuel demand and health evaluation models and is the ?rst attempt to address how oil price changes in?uence public health through the fuel demand system in China. Given its serious air pollution emission and substantial health damages, this paper provides important insights for policy makers in terms of persistent increasing in fuel consumption and the associated health and economic losses.

Keywords: road transport; air pollution emissions; oil prices; public health; fuel demand price elasticities; pollution emission elasticities (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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