In this paper we study the demand for car kilometres in twocar households, focusing on the substitution between cars in response to fuel price changes. We use a large sample of detailed Danish data on twocar households to estimate—for each car owned by the household—own and crossprice effects of increases in fuel costs per kilometre. The empirical results show that failure to capture substitution between cars within the household can result in substantial misspecification biases. Ignoring substitution, we estimate fuel price elasticities of –0.81 and 0.65 for the primary and secondary cars, respectively. When we do take into account the substitution effect, these figures reduce to, respectively, 0.32 and 0.45. We further estimate an alternative version of the model to test the hypothesis that substitution in response to higher fuel prices will be predominantly from the least to the most fuel efficient car, finding partial support for the underlying hypothesis. More importantly, the results of this extended model emphasize the importance of behavioural differences related to the position of the most fuel efficient car in the household, suggesting that households’ fuel efficiency choices are related to their price sensitivity.
Originalsprog  Engelsk 

Publikationsdato  2013 

Antal sider  41 

Status  Udgivet  2013 

Udgivet eksternt  Ja 

Citationsformater

APA

Author

BIBTEX

Harvard

Standard

RIS

Vancouver
@misc{bdc8b1f36a3b4848a5504ef1c0368d55,
title = "Car use within the household",
abstract = "In this paper we study the demand for car kilometres in twocar households, focusing on the substitution between cars in response to fuel price changes. We use a large sample of detailed Danish data on twocar households to estimate—for each car owned by the household—own and crossprice effects of increases in fuel costs per kilometre. The empirical results show that failure to capture substitution between cars within the household can result in substantial misspecification biases. Ignoring substitution, we estimate fuel price elasticities of –0.81 and 0.65 for the primary and secondary cars, respectively. When we do take into account the substitution effect, these figures reduce to, respectively, 0.32 and 0.45. We further estimate an alternative version of the model to test the hypothesis that substitution in response to higher fuel prices will be predominantly from the least to the most fuel efficient car, finding partial support for the underlying hypothesis. More importantly, the results of this extended model emphasize the importance of behavioural differences related to the position of the most fuel efficient car in the household, suggesting that households’ fuel efficiency choices are related to their price sensitivity.",
author = "{de Borger}, Bruno and Ismir Mulalic and Jan Rouwendal",
year = "2013",
language = "English",
type = "Other",
}
TY  GEN
T1  Car use within the household
AU  de Borger, Bruno
AU  Mulalic, Ismir
AU  Rouwendal, Jan
PY  2013
Y1  2013
N2  In this paper we study the demand for car kilometres in twocar households, focusing on the substitution between cars in response to fuel price changes. We use a large sample of detailed Danish data on twocar households to estimate—for each car owned by the household—own and crossprice effects of increases in fuel costs per kilometre. The empirical results show that failure to capture substitution between cars within the household can result in substantial misspecification biases. Ignoring substitution, we estimate fuel price elasticities of –0.81 and 0.65 for the primary and secondary cars, respectively. When we do take into account the substitution effect, these figures reduce to, respectively, 0.32 and 0.45. We further estimate an alternative version of the model to test the hypothesis that substitution in response to higher fuel prices will be predominantly from the least to the most fuel efficient car, finding partial support for the underlying hypothesis. More importantly, the results of this extended model emphasize the importance of behavioural differences related to the position of the most fuel efficient car in the household, suggesting that households’ fuel efficiency choices are related to their price sensitivity.
AB  In this paper we study the demand for car kilometres in twocar households, focusing on the substitution between cars in response to fuel price changes. We use a large sample of detailed Danish data on twocar households to estimate—for each car owned by the household—own and crossprice effects of increases in fuel costs per kilometre. The empirical results show that failure to capture substitution between cars within the household can result in substantial misspecification biases. Ignoring substitution, we estimate fuel price elasticities of –0.81 and 0.65 for the primary and secondary cars, respectively. When we do take into account the substitution effect, these figures reduce to, respectively, 0.32 and 0.45. We further estimate an alternative version of the model to test the hypothesis that substitution in response to higher fuel prices will be predominantly from the least to the most fuel efficient car, finding partial support for the underlying hypothesis. More importantly, the results of this extended model emphasize the importance of behavioural differences related to the position of the most fuel efficient car in the household, suggesting that households’ fuel efficiency choices are related to their price sensitivity.
M3  Other contribution
ER 