ECONOMETRIC ANALYSIS OF THE DEMAND FOR GASOLINE AT THE STATE LEVEL

This report is a detailed description of an investigation into factors influencing levels of highway gasoline use per household and per vehicle at the state level. The considerable variability in consumption rates is documented. Gasoline use per vehicle ranged from 588.7 gal in Pennsylvania to 900.0 gal in Arkanses in 1975. Household use in the same year was lowest in New York (864.5 gal) and highest in Wyoming (2222.0 gal). Determinants of the demand for highway gasoline were identified based on economic theory of the demand for travel. Exploratory theoretical analyses led to the conclusion that important state-specific influences were not being adequately accounted for by the available time series (1966-75) of cross-sectional (state) variables. These state effects appeared to be strongly correlated with income. Two time-series cross-sectional (TSCS) regression techniques were employed producing reasonable and consistent models. Elasticity estimates were slightly higher than estimates using earlier data. In order to analyze the determinants of differences in state gasoline use rates, a two-phase modeling approach was used which first estimates a demand equation utilizing key socioeconomic variables. The TSCS technique used to estimate the equation produces quantitative estimates of state-specific deviations from predicted consumption levels. In the second stage these state-specific effects are regressed against a set of explanatory variables describing such state characteristics as spatial structure, climate, and employment in agriculture. State household gasoline use rates were found to be negatively related to population density, percent of population living in metropolitan areas, agricultural employment, severe winter weather, and small car share of the vehicle fleet. They were positively related to the percentage of the population of working age and to the level of tourist activity.

  • Corporate Authors:

    Oak Ridge National Laboratory

    Department of Energy
    Oak Ridge, TN  United States  37831
  • Authors:
    • Greene, D L
  • Publication Date: 1978-7

Media Info

  • Features: Appendices; Figures; References; Tables;
  • Pagination: 129 p.

Subject/Index Terms

Filing Info

  • Accession Number: 00179833
  • Record Type: Publication
  • Report/Paper Numbers: ORNL-TM-6326
  • Contract Numbers: W-7405-eng-26
  • Files: TRIS
  • Created Date: Oct 12 1978 12:00AM