The Demand for Car Fuel Efficiency: An Hedonic Price Approach

Robert Witt

No 77, Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) from Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey

Abstract: This paper uses an hedonic price approach to estimate the effect of petrol price changes on fuel efficiency and other attributes using data for new cars in the UK. In contrast with Atkinson and Halvorsen (1984), the long-run petrol price elasticity of demand for fuel efficiency is very small, suggesting that the long-run own-price elasticity of demand for petrol is less than unity. The results imply that the adjustment process within the new car market permits little substitution for more fuel efficient cars in response to petrol price changes.

JEL-codes: D12 R40 (search for similar items in EconPapers)
Pages: 32 pages
Date: 1994-10
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Persistent link: https://EconPapers.repec.org/RePEc:sur:seedps:77

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