A tale of two tails: Commuting and the fuel price response in driving

Abstract

The consumer price responsiveness of driving demand is central to the welfare consequences of fuel price changes. This study uses rich data covering the entire population of vehicles and consumers in Denmark to find a medium-run price elasticity of driving of-0.30. We uncover an important feature of driving demand: two small groups of much more responsive households that make up the lower and upper tails of the work distance distribution. The first group lives close to work in urban areas. The second group lives outside of major urban areas and has the longest commutes. Access to public transport appears to be the force behind the existence of the tails, enabling the switch away from driving. We find that a fuel price increase of 1 DKK/liter implies an average deadweight loss of 0.66 DKK/liter, but there is considerable heterogeneity and the tails bear a larger share of the loss.

Do vehicle efficiency improvements lead to energy savings? The rebound effect in Great Britain

“…Secondly, our elasticity reflects changes on an annual level (a short-run effect), the estimates of Stapleton et al [12] are a long-run effect. Our estimate is similarly smaller than that found by Gillingham et al [18] of ≈ -0.3 for Denmark which may again be due to their estimate using data on driving periods over 2-4 years.…”

“…A9). Our results can be compared to the findings of Gillingham et al [15,18] who similarly find β Price becomes more negative (i.e. larger magnitude) for drivers in higher income, urban areas in both California and Denmark.…”

“…This social and geographical heterogeneity is useful for comparing the results of studies in different countries. For example, Gillingham et al [18] (drivers with particularly high or low mileage) being more sensitive to fuel price in Europe than in the USA, perhaps due to greater public transport provision.…”

Is Bicycle Sharing an Environmental Practice? Evidence from a Life Cycle Assessment Based on Behavioral Surveys

“…In February 2018, the rental fee of Mobike and OFO's monthly card raised from 1 to 20 RMB [65], which may affect users' decisions. Referring to commuting and driving elasticity coefficients [66,67], this paper assumes that the elasticity coefficient of shared bicycle price is 0.15, that is, when the rental fee of shared bicycle increases by 10%, the demand for shared bicycles decreases by 1.5% and the demand for other traveling modes increases by 1.5%. We explore the changes in LCA results relative to that of the base scenario when the range of rental fee variation is set between 80% and 120%.…”

Healthy Climate, Healthy Bodies: Optimal Fuel Taxation and Physical Activity

“…Standalone marginal increases in fuel taxes are unlikely to spur significant behaviour change in drivers, because the response to a fuel tax is to alter fuel consumption, but not to reduce the amount or distances travelled by car -the demand for VMT is more inelastic than the demand for fuel(Gillingham and Munk-Nielsen, 2019).…”