The University of Tennessee, KnoxvilleThe Howard H. Baker, Jr. Center for Public Policy

Fuel Price Increases and the Timing of Changes in Household Driving Decisions

On November 19, 2012, in Feature, Home Page, News, Research and Publications, by

Baker Center Fellow and assistant professor of Economics, Jacob LaRiviere, recently co-authored an article on fuel price increases in the Journal of Environmental Economics and Management.  His co-author was Melanie Cozad, Furman University, and the entire article can be viewed here:  LaRiviere Cozad JEEM

LaRiviere and Cozad, provided this introduction to their research:

 In order to develop a portfolio of national policies aimed at reducing energy use and greenhouse gas (GHG) emissions, there is significant interest in identifying the mechanisms through which firms and consumers decide to purchase new, more energy efficient durable goods.

Their research used the oil price increase of 1979 and found that it induced significant decreases in carbon emissions on both the intensive (miles driven) and extensive (auto fuel efficiency) margins.  Read the entire article for additional findings, which have important implications for estimating demand elasticities for durable goods with respect to energy prices and the price elasticity of the fuels themselves.

 

 
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