 Demand for New Car Fuel Economy in the UK, 1970-2005David Bonilla and Timothy Foxon Journal of Transport Economics and Policy, 2009, vol. 43, issue 1, 55-83 Abstract: During the past thirty years, governments have sought to stimulate improvements in new car fuel economy to contribute to air quality, energy security, and climate change goals. We analysed the demand for new car fuel economy in the UK using a two-stage econometric model to investigate the drivers of this demand in the short and long terms over the period 1970-2004. We found that higher incomes and long-term price changes were the main drivers to achieve improvements in fuel economy, particularly for petrol cars, and that new car fuel economy changes were scarcely affected by the Voluntary Agreement on CO 2 emissions reductions adopted in the 1990s. We found, in agreement with other studies, that the demand for fuel economy was price inelastic for both fuels. Our calculated long-term income elasticity (petrol with −0.31 and diesel fuels with −0.20) values are above the range of international studies for petrol but within the range for diesel. An aggregate model of fuel economy gives a fuel price elasticity of −0.32 and an elasticity of −0.26 with respect to UK disposable income. © 2009 LSE and the University of Bath Date: 2009 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:tpe:jtecpo:v:43:y:2009:i:1:p:55-83 Access Statistics for this article Journal of Transport Economics and Policy is currently edited by B T Bayliss, S A Morrison, A Smith and D Graham More articles in Journal of Transport Economics and Policy from University of Bath |
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