Highlights First fuel demand elasticities for the Lisbon Metropolitan Area. Demand models account for role of both cost and availability of public transport. Income and price elasticities are relatively higher compared to previous evidence. Weak evidence of reduction in fuel demand due to reduced cost of public transport. European 2020 target achievable only with continuing recession and high fuel prices.
Abstract This paper estimates fuel demand models for the Lisbon Metropolitan Area (AML) and uses the demand elasticities obtained to predict future levels of road transport CO2 greenhouse gas emissions. Data for the municipalities constituting the AML and the period 1993–2010 are analysed using static and dynamic panel data models to measure the relative importance of fuel price, income, vehicle stock, the price of public transport, and the availability of urban and suburban rail networks on fuel demand. To the best of our knowledge, this is the first study in the Portuguese context to produce fuel demand elasticities for a specific metropolitan area, as opposed to the estimation of country-level aggregate elasticities. Our findings indicate that the elasticity of fuel demand with respect to fuel price ranges between −0.48 and −0.72 in the short run and between −1.19 and −1.82 in the long run. Income elasticities are found to range between 0.51 and 0.54 in the short run and between 1.26 and 1.37 in the long run. The elasticity of fuel demand with respect to vehicle stock (keeping population constant) is 0.57 in the short run and 1.43 in the long run. There is only weak evidence of a reduction in fuel demand as a result of a decrease in the price of public transport, and no effect of greater availability of rail networks. Based on the elasticities estimated, we predict road transport CO2 emissions for the AML according to different macroeconomic scenarios. The results indicate that the emissions target is only achieved in the scenario of poor economic performance. In the presence of medium and strong economic growth, fuel prices would need to increase by about 7% and 11% per year respectively in order to meet the emissions target.
Estimating fuel demand elasticities to evaluate CO2 emissions: Panel data evidence for the Lisbon Metropolitan Area
Transportation Research Part A: Policy and Practice ; 67 ; 30-46
2014-06-02
17 pages
Article (Journal)
Electronic Resource
English
Estimating Price Elasticities of Ferry Demand
Online Contents | 2010
|Estimating Price Elasticities of Ferry Demand
Transportation Research Record | 2010
|Elasticities of demand for fuel
British Library Conference Proceedings | 1991
|