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Effect of gasoline prices on car fuel efficiency: Evidence from Lebanon

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  • Marrouch, Walid
  • Mourad, Jana

Abstract

This paper explores how gasoline prices affect the sales of new and used cars in Lebanon. Using a rich dataset on monthly imported cars from 2000 to 2016, a vector autoregressive analysis is used to model different consumer choices between fuel-efficient cars, midsize cars, and fuel-inefficient cars. We report the first empirical evidence on this question from the Middle East and North Africa (MENA) region using individual automobile data. We use within sample and out-of-sample tests to examine whether gasoline prices influence the sale of fuel-efficient cars. Our results show evidence against the hypothesis that rising gasoline prices shift consumers’ demand toward the most fuel-efficient cars.

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  • Marrouch, Walid & Mourad, Jana, 2019. "Effect of gasoline prices on car fuel efficiency: Evidence from Lebanon," Energy Policy, Elsevier, vol. 135(C).
    • Handle: RePEc:eee:enepol:v:135:y:2019:i:c:s0301421519305889
    DOI: 10.1016/j.enpol.2019.111001
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    2. Guangyong Zhang & Lixin Tian & Wenbin Zhang & Xu Yan & Bingyue Wan & Zaili Zhen, 2020. "A Study on the Similarities and Differences of the Conventional Gasoline Spot Price Fluctuation Network between Different Harbors," Sustainability, MDPI, vol. 12(2), pages 1-25, January.
    3. Wang, Kai-Hua & Su, Chi-Wei & Xiao, Yidong & Liu, Lu, 2022. "Is the oil price a barometer of China's automobile market? From a wavelet-based quantile-on-quantile regression perspective," Energy, Elsevier, vol. 240(C).
    4. Moradi, Mohammad Ali & Salimi, Mohsen & Amidpour, Majid, 2021. "Cost-benefit analysis of gasoline demand control policies and its greenhouse gas mitigation co-benefits," Energy, Elsevier, vol. 233(C).
    5. A’aeshah Alhakamy & Areej Alhowaity & Anwar Abdullah Alatawi & Hadeel Alsaadi, 2023. "Are Used Cars More Sustainable? Price Prediction Based on Linear Regression," Sustainability, MDPI, vol. 15(2), pages 1-17, January.
    6. Vietha Devia SS, 2019. "Analysis of Crude Oil Price and Exchange Rate Volatility on Macroeconomic Variables (Case Study of Indonesia as Emerging Economic Country)," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 5(5), pages 257-271.
    7. Guy Assaker & Wassim Shahin, 2022. "What Drives Faculty Publication Citations in the Business Field? Empirical Results from an AACSB Middle Eastern Institution," Publications, MDPI, vol. 10(4), pages 1-29, November.
    8. Kushneel Prakash & Sefa Awaworyi Churchill & Russell Smyth, 2022. "Petrol prices and obesity," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1381-1401, July.

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    More about this item

    Keywords

    Gasoline prices; Automobiles; Consumer choice; Fuel efficiency; Imports; Lebanon;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

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