IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v37y2009i10p3769-3778.html
   My bibliography  Save this article

Fuel demand on UK roads and dieselisation of fuel economy

Author

Listed:
  • Bonilla, David

Abstract

Because of high oil prices, and climate change policy, governments are now seeking ways to improve new car fuel economy thus contributing to air quality and energy security. One strategy is to increase dieselisation rates of the vehicle fleet. Recent trends in fuel economy show improvement since 1995, however, efforts need to go further if the EU Voluntary Agreement targets on CO2 (a greenhouse gas emission standard) are to be achieved. Trends show diesel car sales have accelerated rapidly and that the advantage of new car fuel economy of diesel cars over gasoline ones is narrowing posing a new challenge. We estimate the demand for new car fuel economy in the UK. In the long-run consumers buy fuel economy, but not in the short-run. We found that long-term income and price changes were the main drivers to achieve improvements particularly for diesel cars and that there is no break in the trend of fuel economy induced by the agreement adopted in the 1990s. Policy should target more closely both consumer choice of, and use of, diesel cars.

Suggested Citation

  • Bonilla, David, 2009. "Fuel demand on UK roads and dieselisation of fuel economy," Energy Policy, Elsevier, vol. 37(10), pages 3769-3778, October.
  • Handle: RePEc:eee:enepol:v:37:y:2009:i:10:p:3769-3778
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301-4215(09)00529-1
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mogens Fosgerau, 2005. "Speed and Income," Journal of Transport Economics and Policy, University of Bath, vol. 39(2), pages 225-240, May.
    2. Sweeney, James L., 1979. "Effects of Federal policies on gasoline consumption," Resources and Energy, Elsevier, vol. 2(1), pages 3-26, September.
    3. Kenneth A. Small & Kurt Van Dender, 2007. "Fuel Efficiency and Motor Vehicle Travel: The Declining Rebound Effect," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 25-52.
    4. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    5. N/A, 2006. "The UK Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 196(1), pages 40-59, April.
    6. Schipper, Lee & Tax, Wienke, 1994. "New car test and actual fuel economy: yet another gap?," Transport Policy, Elsevier, vol. 1(4), pages 257-265, October.
    7. Alan Greenspan & Darrel Cohen, 1999. "Motor Vehicle Stocks, Scrappage, And Sales," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 369-383, August.
    8. Alogoskoufis, George & Smith, Ron, 1991. "On Error Correction Models: Specification, Interpretation, Estimation," Journal of Economic Surveys, Wiley Blackwell, vol. 5(1), pages 97-128.
    9. David L. Greene, 1990. "CAFE OR PRICE?: An Analysis of the Effects of Federal Fuel Economy Regulations and Gasoline Price on New Car MPG, 1978-89," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 37-58.
    10. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
    11. Dermot Gately, 1990. "The U.S. Demand for Highway Travel and Motor Fuel," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 59-74.
    12. Ramanathan, R., 1999. "Short- and long-run elasticities of gasoline demand in India: An empirical analysis using cointegration techniques," Energy Economics, Elsevier, vol. 21(4), pages 321-330, August.
    13. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    14. Masih, Abul M. M. & Masih, Rumi, 1997. "On the temporal causal relationship between energy consumption, real income, and prices: Some new evidence from Asian-energy dependent NICs Based on a multivariate cointegration/vector error-correctio," Journal of Policy Modeling, Elsevier, vol. 19(4), pages 417-440, August.
    15. Eltony, M. N. & Al-Mutairi, N. H., 1995. "Demand for gasoline in Kuwait : An empirical analysis using cointegration techniques," Energy Economics, Elsevier, vol. 17(3), pages 249-253, July.
    16. Bentzen, Jan, 1994. "An empirical analysis of gasoline demand in Denmark using cointegration techniques," Energy Economics, Elsevier, vol. 16(2), pages 139-143, April.
    17. Johnstone, N., 1995. "Modelling Passenger Demand, Energy Consumption and Pollution Emissions in the Transport Sector," Cambridge Working Papers in Economics 9527, Faculty of Economics, University of Cambridge.
    18. Baltagi, Badi H. & Griffin, James M., 1983. "Gasoline demand in the OECD : An application of pooling and testing procedures," European Economic Review, Elsevier, vol. 22(2), pages 117-137, July.
    19. Atkinson, Scott E & Halvorsen, Robert, 1984. "A New Hedonic Technique for Estimating Attribute Demand: An Application to the Demand for Automobile Fuel Efficiency," The Review of Economics and Statistics, MIT Press, vol. 66(3), pages 417-426, August.
    20. Rice, Phillip & Frater, Philip, 1989. "The demand for petrol with explicit new car fuel efficiency effects : A UK study 1977-1986," Energy Economics, Elsevier, vol. 11(2), pages 95-104, April.
    21. Samimi, Rodney, 1995. "Road transport energy demand in Australia: A cointegration approach," Energy Economics, Elsevier, vol. 17(4), pages 329-339, October.
    22. Robert Witt, 1997. "The demand for car fuel efficiency: some evidence for the UK," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1249-1254.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xu, Jiayi & Tan-Soo, Jie-Sheng & Chu, Yanlai & Zhang, Xiao-Bing, 2023. "Gasoline price and fuel economy of new automobiles: Evidence from Chinese cities," Energy Economics, Elsevier, vol. 126(C).
    2. Lovelace, R. & Beck, S.B.M. & Watson, M. & Wild, A., 2011. "Assessing the energy implications of replacing car trips with bicycle trips in Sheffield, UK," Energy Policy, Elsevier, vol. 39(4), pages 2075-2087, April.
    3. Mattila, Tuomas & Antikainen, Riina, 2011. "Backcasting sustainable freight transport systems for Europe in 2050," Energy Policy, Elsevier, vol. 39(3), pages 1241-1248, March.
    4. de Freitas, Luciano Charlita & Kaneko, Shinji, 2011. "Ethanol demand in Brazil: Regional approach," Energy Policy, Elsevier, vol. 39(5), pages 2289-2298, May.
    5. Schipper, Lee & Fulton, Lew, 2013. "Dazzled by diesel? The impact on carbon dioxide emissions of the shift to diesels in Europe through 2009," Energy Policy, Elsevier, vol. 54(C), pages 3-10.
    6. Schipper, Lee, 2011. "Automobile use, fuel economy and CO2 emissions in industrialized countries: Encouraging trends through 2008?," Transport Policy, Elsevier, vol. 18(2), pages 358-372, March.
    7. Kloess, Maximilian & Müller, Andreas, 2011. "Simulating the impact of policy, energy prices and technological progress on the passenger car fleet in Austria--A model based analysis 2010-2050," Energy Policy, Elsevier, vol. 39(9), pages 5045-5062, September.
    8. Wadud, Zia, 2016. "Diesel demand in the road freight sector in the UK: Estimates for different vehicle types," Applied Energy, Elsevier, vol. 165(C), pages 849-857.
    9. Weber, Sylvain, 2019. "Consumers' preferences on the Swiss car market: A revealed preference approach," Transport Policy, Elsevier, vol. 75(C), pages 109-118.
    10. González, Rosa Marina & Marrero, Gustavo A. & Rodríguez-López, Jesús & Marrero, Ángel S., 2019. "Analyzing CO2 emissions from passenger cars in Europe: A dynamic panel data approach," Energy Policy, Elsevier, vol. 129(C), pages 1271-1281.
    11. Mahlia, T.M.I. & Tohno, S. & Tezuka, T., 2012. "History and current status of the motor vehicle energy labeling and its implementation possibilities in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 1828-1844.
    12. Heun, Matthew Kuperus & Owen, Anne & Brockway, Paul E., 2018. "A physical supply-use table framework for energy analysis on the energy conversion chain," Applied Energy, Elsevier, vol. 226(C), pages 1134-1162.
    13. Wadud, Zia, 2014. "New vehicle fuel economy in the UK: Impact of the recession and recent policies," Energy Policy, Elsevier, vol. 74(C), pages 215-223.
    14. Goerlich, Roland & Wirl, Franz, 2012. "Interdependencies between transport fuel demand, efficiency and quality: An application to Austria," Energy Policy, Elsevier, vol. 41(C), pages 47-58.
    15. Siti Indati Mustapa & Hussain Ali Bekhet, 2015. "Investigating Factors Affecting CO2 Emissions in Malaysian Road Transport Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1073-1083.
    16. González, Rosa Marina & Marrero, Gustavo A., 2012. "The effect of dieselization in passenger cars emissions for Spanish regions: 1998–2006," Energy Policy, Elsevier, vol. 51(C), pages 213-222.
    17. Zimmer, Anne & Koch, Nicolas, 2017. "Fuel consumption dynamics in Europe: Tax reform implications for air pollution and carbon emissions," Transportation Research Part A: Policy and Practice, Elsevier, vol. 106(C), pages 22-50.
    18. Tovar, Miguel A., 2011. "An integral evaluation of dieselisation policies for households' cars," Energy Policy, Elsevier, vol. 39(9), pages 5228-5242, September.
    19. Gallo, Mariano, 2011. "A fuel surcharge policy for reducing road traffic greenhouse gas emissions," Transport Policy, Elsevier, vol. 18(2), pages 413-424, March.
    20. Marrouch, Walid & Mourad, Jana, 2019. "Effect of gasoline prices on car fuel efficiency: Evidence from Lebanon," Energy Policy, Elsevier, vol. 135(C).
    21. Barla, Philippe & Gilbert-Gonthier, Mathieu & Kuelah, Jean-René Tagne, 2014. "The demand for road diesel in Canada," Energy Economics, Elsevier, vol. 43(C), pages 316-322.
    22. Emmanuel Kwabena Anin & Jonathan Annan & Alexander Fianko Otchere, 2013. "Evaluating the Role of Mass Transit and its Effect on Fuel Efficiency in the Kumasi Metropolis, Ghana," International Journal of Business and Social Research, LAR Center Press, vol. 3(3), pages 107-116, March.
    23. Gass, V. & Schmidt, J. & Schmid, E., 2014. "Analysis of alternative policy instruments to promote electric vehicles in Austria," Renewable Energy, Elsevier, vol. 61(C), pages 96-101.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Scott, K. Rebecca, 2011. "Demand and Price Volatility: Rational Habits in International Gasoline Demand," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt2q87432b, Department of Agricultural & Resource Economics, UC Berkeley.
    2. Brons, Martijn & Nijkamp, Peter & Pels, Eric & Rietveld, Piet, 2008. "A meta-analysis of the price elasticity of gasoline demand. A SUR approach," Energy Economics, Elsevier, vol. 30(5), pages 2105-2122, September.
    3. Martijn Brons & Peter Nijkamp & Eric Pels & Piet Rietveld, 2006. "A Meta-analysis of the Price Elasticity of Gasoline Demand. A System of Equations Approach," Tinbergen Institute Discussion Papers 06-106/3, Tinbergen Institute.
    4. Broberg, Thomas, 2014. "Relative income and the WTP for public goods - A case study of forest conservation in Sweden," CERE Working Papers 2014:6, CERE - the Center for Environmental and Resource Economics.
    5. Jimy Ferrer Carbonell & Roberto Escalante Semerena, 2014. "Demanda de gasolina en la zona metropolitana del Valle de México: análisis empírico de la reducción del subsidio," Revista de Economía del Rosario, Universidad del Rosario, June.
    6. Scott, K. Rebecca, 2015. "Demand and price uncertainty: Rational habits in international gasoline demand," Energy, Elsevier, vol. 79(C), pages 40-49.
    7. Burke, Paul J. & Nishitateno, Shuhei, 2013. "Gasoline prices, gasoline consumption, and new-vehicle fuel economy: Evidence for a large sample of countries," Energy Economics, Elsevier, vol. 36(C), pages 363-370.
    8. Jeyhun I. Mikayilov & Shahriyar Mukhtarov & Hasan Dinçer & Serhat Yüksel & Rıdvan Aydın, 2020. "Elasticity Analysis of Fossil Energy Sources for Sustainable Economies: A Case of Gasoline Consumption in Turkey," Energies, MDPI, vol. 13(3), pages 1-15, February.
    9. Polemis, Michael L., 2006. "Empirical assessment of the determinants of road energy demand in Greece," Energy Economics, Elsevier, vol. 28(3), pages 385-403, May.
    10. Ramanathan, R., 2001. "The long-run behaviour of transport performance in India: a cointegration approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 35(4), pages 309-320, May.
    11. Brännlund, Runar, 2013. "The effects on energy saving from taxes on motor fuels: The Swedish case," CERE Working Papers 2013:6, CERE - the Center for Environmental and Resource Economics.
    12. Ramanathan, R., 1999. "Short- and long-run elasticities of gasoline demand in India: An empirical analysis using cointegration techniques," Energy Economics, Elsevier, vol. 21(4), pages 321-330, August.
    13. Shaw, Charles, 2020. "Econometric Analysis of Demand for Petrol in India, 1966-2019," MPRA Paper 104797, University Library of Munich, Germany.
    14. Havranek, Tomas & Irsova, Zuzana & Janda, Karel, 2012. "Demand for gasoline is more price-inelastic than commonly thought," Energy Economics, Elsevier, vol. 34(1), pages 201-207.
    15. de Freitas, Luciano Charlita & Kaneko, Shinji, 2011. "Ethanol demand under the flex-fuel technology regime in Brazil," Energy Economics, Elsevier, vol. 33(6), pages 1146-1154.
    16. Dahl, Carol A., 2012. "Measuring global gasoline and diesel price and income elasticities," Energy Policy, Elsevier, vol. 41(C), pages 2-13.
    17. Michael Fotiadis & Michael L Polemis, 2018. "The Role of Sustainability‐Related Strategies on the Biofuel Industry: Trends, Prospects and Challenges," Business Strategy and the Environment, Wiley Blackwell, vol. 27(6), pages 757-772, September.
    18. Daldoul Manel & Dakhlaoui Ahlem, 2021. "The Direct Rebound Effect and Energy Efficiency Policy: An Econometric Estimation in the case of Tunisian Transport Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 11(5), pages 235-243.
    19. Nasser Al Dossary & Carol A. Dahl, 2009. "Is Global Gasoline Demand Still as Responsive to Price?," Working Papers 2009-01, Colorado School of Mines, Division of Economics and Business.
    20. Baranzini, Andrea & Weber, Sylvain, 2013. "Elasticities of gasoline demand in Switzerland," Energy Policy, Elsevier, vol. 63(C), pages 674-680.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:37:y:2009:i:10:p:3769-3778. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.