Asymmetric responses of highway travel demand to changes in fuel price: An explanation via fuel price uncertainty

Previous research has examined asymmetric effects of fuel price uncertainty on energy demand. If one considers that energy demand is related to travel demand, the changes in fuel prices may have asymmetric effects on highway travel demand via fuel price uncertainty. In other words, when in general fuel price is steadily rising, the highway traffic volume decreases by a small percentage. On the other hand, the highway traffic volume increases by a large percentage when fuel prices are falling. The authors hypothesize that the uncertainty in fuel prices generates this kind of asymmetric effect on highway traffic volume in Korea. The authors use the Korean monthly fuel price and highway traffic volume data from 2001 to 2009, and define the intra-month (weekly) fuel price changes as monthly fuel price volatility which is a proxy for monthly fuel price uncertainty. The authors found that the direction of the change in fuel prices had asymmetric effects on highway travel demand and that the fuel price uncertainty led drivers to respond asymmetrically to the changes in fuel prices.

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  • English

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  • Accession Number: 01526714
  • Record Type: Publication
  • Files: TRIS
  • Created Date: May 20 2014 9:59AM