DEMAND FOR TRAVEL AND THE GASOLINE CRISIS

This paper uses traffic count data to estimate and analyze the demand for gasoline and different kinds of work and leisure travel in Califormia from 1970 to 1975. Empirical results of the ordinary least-squares regressions show the price elasticity of gasoline and travel to be quite inelastic-between -0.05 and -0.50. The income elasticities range between 0.5 and 1.5. Furthermore, the results suggest that leisure-oriented travel is less price- and income- sensitive than work-oriented travel. Results also indicate that travel and gasoline are affected by seasonal variations. In addition to the conventional demand analysis, the study investigates the gasoline crisis in California in 1974. During the gasoline crisis, the existence of queuing at service stations suggested that disequilibrium existed in the gasoline market. Due to the difficulty in purchasing gasoline, the true price of gasoline exceeded the actual price paid at the pump. Results show that the true price of gasoline rose from a precrisis price of $0.31/gal to more than $1.00/gal in some instances during the height of the crisis in March 1974. Furthermore, the value that would have been transferred from consumers of gasoline to suppliers was approximately $355 million. This amount, which averages about $27/licensed California driver, could be thought of as a measure of the gross welfare loss of gasoline rationing. (Author)

Media Info

  • Media Type: Print
  • Features: Tables;
  • Pagination: pp 38-42
  • Monograph Title: Transportation energy: data, forecasting, policy and models
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00331028
  • Record Type: Publication
  • ISBN: 0309031079
  • Files: TRIS, TRB
  • Created Date: Jun 12 1981 12:00AM