Demand for cars and the price of gasoline: the user-cost approach

Journal Article · Sat May 01 04:00:00 EDT 1982 · Rev. Econ. Stat.; (United States)

DOI:https://doi.org/10.2307/1924297· OSTI ID:5334053

Tishler, A

The theory of the user cost of capital is used to estimate the demand for new and used cars in Israel. The results demonstrate that the price of operating costs must be included in the demand function. They also show that the importance of gasoline price increases with engine size. Income elasticities are higher for new than for old cars, and increase with engine size. The inevitability of further increases in gasoline prices implies a further reduction in the average size of cars and a possible decline in the number of cars in the economy unless the trend is moderated by an acceleration in economic growth. The future of the US auto industry will depend to a large extent on its ability to compete in the small- and medium-car markets. 13 references, 3 tables.

• Research Organization: Tel-Aviv Univ., Israel
• OSTI ID: 5334053
• Journal Information: Rev. Econ. Stat.; (United States), Journal Name: Rev. Econ. Stat.; (United States) Vol. 64:2; ISSN RECSA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200* -- Energy Planning & Policy-- Economics & Sociology
32 ENERGY CONSERVATION, CONSUMPTION, AND UTILIZATION
320203 -- Energy Conservation
Consumption
& Utilization-- Transportation-- Land & Roadway
AUTOMOBILES
COST
DEMAND FACTORS
ECONOMIC ELASTICITY
FUELS
GASOLINE
LIQUID FUELS
OPERATING COST
PETROLEUM PRODUCTS
PRICES
VEHICLES