Changes in fuel economy: An analysis of the Spanish car market

Anna Matas (), Josep Raymond () and Andrés Domínguez ()
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Andrés Domínguez: Universitat de Barcelona

No 2016/15, Working Papers from Institut d'Economia de Barcelona (IEB)

Abstract: This paper estimates the role that technological change and car characteristics have played in the rate of fuel consumption of vehicles over time. Using data from the Spanish car market from 1988 to 2013, we estimate a reduced form equation that relates fuel consumption with a set of car characteristics. The results for the sales-weighted sample of vehicles show that energy efficiency would have improved by 32% and 40% for petrol and diesel cars respectively had car characteristics been held constant at 1988 values. However, the shift to bigger and more fuel-consuming cars reduced the gains from technological progress. Additionally, using the results of the fuel equation we show that, besides a natural growth rate of 1.1%, technological progress is affected by both the international price of oil and the adoption of mandatory emission standards. Moreover, according to our estimations, a 1% growth in GDP would modify car characteristics in such a way that fuel consumption would increase by around 0.23% for petrol cars and 0.35% for diesel cars.

Keywords: fuel efficiency; technological change; car characteristics (search for similar items in EconPapers)
JEL-codes: L62 Q50 R4 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur, nep-ino, nep-net and nep-tre
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Citations: View citations in EconPapers (1)

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Working Paper: Changes in fuel economy: An analysis of the Spanish car market (2016)
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