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How effective are policies to reduce gasoline consumption? Evaluating a set of measures in Spain

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  • Asensio, Javier
  • Gómez-Lobo, Andrés
  • Matas, Anna

Abstract

Using a panel of 48 provinces for four years we empirically analyze a series of temporary and permanent policies aimed at curbing fuel consumption implemented in Spain between March and June 2011. The first policy was a reduction in the speed limit in highways. The second policy was an increase in the biofuel content of fuels used in the transport sector. The third measure was a decrease of 5% in commuting and regional train fares that resulted in two major metropolitan areas reducing their overall fare for public transit. The results indicate that the speed limit reduction in highways lowered gasoline consumption by 2% to 3%, while an increase in the biofuel content of gasoline increased this consumption. This last result is consistent with experimental evidence that indicates that mileage per liter falls with an increase in the biofuel content in gasolines. As for the reduction in transit fares, we do not find a significant effect for this policy. However, in specifications including the urban transit fare for the major cities in each province the estimated cross-price elasticity of the demand for gasoline – used as a proxy for car use – with respect to the price of transit is within the range reported in the literature. This is important since one of the main efficiency justifications for subsidizing public transit rests on the positive value of this parameter and most of the estimates reported in the literature are quite dated.

Suggested Citation

  • Asensio, Javier & Gómez-Lobo, Andrés & Matas, Anna, 2014. "How effective are policies to reduce gasoline consumption? Evaluating a set of measures in Spain," Energy Economics, Elsevier, vol. 42(C), pages 34-42.
    • Handle: RePEc:eee:eneeco:v:42:y:2014:i:c:p:34-42
    DOI: 10.1016/j.eneco.2013.11.011
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    References listed on IDEAS

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    1. Ian W. H. Parry & Kenneth A. Small, 2009. "Should Urban Transit Subsidies Be Reduced?," American Economic Review, American Economic Association, vol. 99(3), pages 700-724, June.
    2. Bayraktar, Hakan, 2005. "Experimental and theoretical investigation of using gasoline–ethanol blends in spark-ignition engines," Renewable Energy, Elsevier, vol. 30(11), pages 1733-1747.
    3. Tomás Serebrisky & Andrés Gómez‐Lobo & Nicolás Estupiñán & Ramón Muñoz‐Raskin, 2009. "Affordability and Subsidies in Public Urban Transport: What Do We Mean, What Can Be Done?," Transport Reviews, Taylor & Francis Journals, vol. 29(6), pages 715-739, January.
    4. Ana Matas, 1991. "La demanda de transporte urbano: un análisis de las elasticidades y valoraciones del tiempo," Investigaciones Economicas, Fundación SEPI, vol. 15(2), pages 249-267, May.
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    Citations

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    Cited by:

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    2. Bakhat, Mohcine & Labandeira, Xavier & Labeaga, José M. & López-Otero, Xiral, 2017. "Elasticities of transport fuels at times of economic crisis: An empirical analysis for Spain," Energy Economics, Elsevier, vol. 68(S1), pages 66-80.
    3. Bergantino, Angela Stefania & Intini, Mario & Perdiguero, Jordi, 2020. "Pay cycles and fuel price: a quasi experimental approach," The Warwick Economics Research Paper Series (TWERPS) 1288, University of Warwick, Department of Economics.
    4. Boring, Anne & Philippe, Arnaud, 2021. "Reducing discrimination in the field: Evidence from an awareness raising intervention targeting gender biases in student evaluations of teaching," Journal of Public Economics, Elsevier, vol. 193(C).
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    7. Gössling, Stefan & Metzler, Daniel, 2017. "Germany's climate policy: Facing an automobile dilemma," Energy Policy, Elsevier, vol. 105(C), pages 418-428.

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    More about this item

    Keywords

    Fuel consumption; Cross-elasticities; Transport policies; Biofuel; Speed limit reduction;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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