Skip to main content
SpringerLink
Log in

Do High Oil Prices Matter? Evidence on the Mobility Behavior of German Households

  • Published:
Environmental and Resource Economics Aims and scope Submit manuscript

Abstract

Focusing on travel survey data from Germany, this paper investigates the determinants of automobile travel, with the specific aim of quantifying the effects of fuel prices and fuel economy. The analysis is predicated on the notion that car mileage is a two-stage decision process, comprising the discrete choice of whether to own a car and the continuous choice of distance traveled. To capture this process, we employ censored regression models consisting of Probit and OLS estimators, which allows us to gauge the extent to which sample selectivity may bias the results. Our elasticity estimates indicate a significant positive association between increased fuel economy and increased driving, and a significantly negative fuel-price elasticity, which ranges between − 35% and − 41%. Taken together, these results suggest that fuel taxes are likely to be a more effective policy measure in reducing emissions than fuel-efficiency standards.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Becker GS (1965) A theory of the allocation of time. Econ J 75: 493–517

    Article  Google Scholar 

  • Binswanger M (2001) Technological progress and sustainable development: what about the rebound effect?. Ecol Econ 36: 119–132

    Article  Google Scholar 

  • Dow WH, Norton EC (2003) Choosing between and interpreting the Heckit and Two-Part Models for corner solutions. Health Serv Outcomes Res Methodol 4: 5–18

    Article  Google Scholar 

  • Duan N, Manning W, Morris C, Newhouse J (1984) Choosing between the Sample-Selection Model and the Multi-Part Model. J Bus Econ Stat 2: 283–289

    Article  Google Scholar 

  • EC (European Commission) (2007) Accompanying document to the PROPOSAL FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND COUNCIL for a regulation to reduce CO2 emissions from passenger cars, Impact Assessment, COM(2007)865 final, SEC, 2007, p 1724

  • Frondel M, Peters J, Vance C (2008) Identifying the rebound: evidence from a German Household Panel. Energy J 29(4): 154–163

    Google Scholar 

  • Goodwin P, Dargay J, Hanly M (2004) Elasticities of road traffic and fuel consumption with respect to price and income: a review. Transp Rev 24(3): 275–292

    Article  Google Scholar 

  • Greene DL, Kahn JR, Gibson RC (1999) Fuel economy rebound effect for U.S. household vehicles. Energy J 20(3): 1–31

    Google Scholar 

  • Greening LA, Greene DL (1997) Energy use, technical efficiency and the rebound effect: a review of the Literature. Report to the Office of Policy Analysis and International Affairs, US Department of Energy, Washington, DC

  • Hay J, Olsen R (1984) Let them eat cake: a note on comparing alternative models of the demand for medical care. J Bus Econ Stat 2: 279–282

    Article  Google Scholar 

  • Heckman J (1979) Sample selection bias as a specification error. Econometrica 47: 153–161

    Article  Google Scholar 

  • King G, Honaker J, Joseph A, Scheve K (2001) Analyzing incomplete political science data: an alternative algorithm for multiple imputation. Am Polit Sci Rev 95: 49–69

    Google Scholar 

  • Lueng SF, Yu S (1996) On the choice between sample selection and Two-Part Models. J Econom 72: 197–229

    Article  Google Scholar 

  • MiD (Mobilität in Deutschland) (2008) German Federal Ministry of Transport, Building and Urban Affairs. http://www.kontiv2002.de/publikationen.htm

  • MOP (German Mobility Panel) (2007) http://www.ifv.uni-karlsruhe.de/MOP.html

  • Small KA, Van Dender K (2007) Fuel efficiency and motor vehicle travel: the declining rebound effect. Energy J 28(1): 25–52

    Google Scholar 

  • Sorrell S, Dimitropoulos J (2008) The rebound effect: microeconomic definitions limitations, and extensions. Ecol Econ 65(3): 636–649

    Article  Google Scholar 

  • Sterner T (2007) Fuel taxes: an important instrument for climate policy. Energy Policy 35: 3194–3202

    Article  Google Scholar 

  • Walker IO, Wirl F (1993) Asymmetric energy demand due to endogenous efficiencies: an empirical investigation of the transport sector. Energy J 14: 183–205

    Google Scholar 

  • West SE (2004) Distributional effects of alternative vehicle pollution control policies. J Public Econ 88(3-4): 735–757

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI Essen), Hohenzollernstr. 1-3, 45128, Essen, Germany

    Manuel Frondel & Colin Vance

Authors
  1. Manuel Frondel
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Colin Vance
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Colin Vance.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Frondel, M., Vance, C. Do High Oil Prices Matter? Evidence on the Mobility Behavior of German Households. Environ Resource Econ 43, 81–94 (2009). https://doi.org/10.1007/s10640-008-9246-4

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10640-008-9246-4

Keywords

JEL Classification

Search

Navigation