Estimating elasticities of household demand for fuels from choice elasticities based on stated preference

Potential responsiveness to new vehicle technology and fuels, including ethanol, biodiesel and various hybrid alternatives, has been explored in a stated choice survey. Respondents chose between four hypothetical fuel and vehicle alternatives in each of nine scenarios. The results have been modelled with nested logit (NL) and choice elasticities calculated. The NL model has also been re-estimated with endogenous weights to match actual and expected consumption distributions and the corresponding choice elasticities derived. Only in the case of work trips can choice elasticities generally be interpreted as demand elasticities. Otherwise the choice element is only one part of demand. A particular demand elasticity may be similar to the corresponding choice elasticity while in other cases they will differ substantially, the difference being due to the income effect. The choice elasticities have been modified to restore symmetry and zero share weighted column sums. The respective demand elasticities have then been derived by adding the calculated income term for each fuel. The changes in household demand elasticities depend on two factors: the fuel share and the income effect applied to the elasticity. Generally when the shares are relatively small, the own-choice and own-price elasticities are similar. This is due to the fact that when the share is multiplied by group elasticity, the result is very little difference between choice and demand elasticities. In the case of petrol, because it is the dominant product in the group, its own-price elasticity differs greatly from the choice elasticity.


  • English

Media Info

  • Pagination: 9p
  • Monograph Title: 30th Conference of the Australian Institutes of Transport Research (CAITR), 10-12 December, 2008, University of Western Australia Business School

Subject/Index Terms

Filing Info

  • Accession Number: 01525054
  • Record Type: Publication
  • Source Agency: ARRB
  • Files: ITRD, ATRI
  • Created Date: May 20 2014 12:51PM