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Changes in fuel economy: An analysis of the Spanish car market

Author

Listed:
  • Anna Matas

    (Universitat Autònoma de Barcelona & Barcelona Institute of Economics (IEB))

  • José-Luis Raymond

    (Universitat Autònoma de Barcelona)

  • Andrés Domínguez

    (Universitat de Barcelona)

Abstract

This paper estimates the role that technological change and car characteristics have played in the rate of fuel consumption of vehicles over time. Using data from the Spanish car market from 1988 to 2013, we estimate a reduced form equation that relates fuel consumption with a set of car characteristics. The results for the sales-weighted sample of vehicles show that energy efficiency would have improved by 32% and 40% for petrol and diesel cars respectively had car characteristics been held constant at 1988 values. However, the shift to bigger and more fuel-consuming cars reduced the gains from technological progress. Additionally, using the results of the fuel equation we show that, besides a natural growth rate of 1.1%, technological progress is affected by both the international price of oil and the adoption of mandatory emission standards. Moreover, according to our estimations, a 1% growth in GDP would modify car characteristics in such a way that fuel consumption would increase by around 0.23% for petrol cars and 0.35% for diesel cars.

Suggested Citation

  • Anna Matas & José-Luis Raymond & Andrés Domínguez, 2016. "Changes in fuel economy: An analysis of the Spanish car market," Working Papers 2016/15, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2016-15
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    References listed on IDEAS

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    Cited by:

    1. Andrés, Lidia & Padilla, Emilio, 2018. "Driving factors of GHG emissions in the EU transport activity," Transport Policy, Elsevier, vol. 61(C), pages 60-74.

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    More about this item

    Keywords

    fuel efficiency; technological change; car characteristics;
    All these keywords.

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • R4 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics

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