Wadud, Z orcid.org/0000-0003-2692-8299 (2017) Asymmetry in transport fuel demand: Evidence from household level data. Transportation Research, Part D: Transport and Environment, 57. pp. 277-286. ISSN 1361-9209
Abstract
Models for gasoline demand for transportation activities generally assume that demand is perfectly reversible with respect to gasoline price (and income). The small literature which relaxes the reversibility assumption in gasoline demand argues technological fixation leads to this asymmetry and utilizes aggregate time-series model to find evidence in favour of asymmetry. In this research it is suggested that there could also be behavioural factors behind this asymmetric response, possibly due to the loss aversion nature of human beings as described in the prospect theory. For the first time, household level data was used to understand asymmetry in gasoline demand in response to changes in gasoline price and income. There was statistical evidence that gasoline price and income both can induce asymmetric changes in gasoline demand among households. Specifically, elasticity with respect to rising prices and falling income is larger than the elasticity with respect to falling prices and rising income respectively, which is consistent with loss aversion in gasoline purchase behaviour. There was also some evidence of heterogeneity in the asymmetric responses between urban and rural households. The results have implications for transport-related energy tax policies or subsidies, while the method can be applied directly for non-energy goods as well.
Metadata
Item Type: | Article |
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Authors/Creators: | |
Copyright, Publisher and Additional Information: | © 2017 Elsevier Ltd. This is an author produced version of a paper published in Transportation Research Part D: Transport and Environment. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | asymmetry; gasoline demand; elasticity; reversibility; behavioural response; transport fuel |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Engineering & Physical Sciences (Leeds) > School of Chemical & Process Engineering (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 25 Sep 2017 10:35 |
Last Modified: | 07 Oct 2018 00:38 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.trd.2017.09.025 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:121629 |