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Article
Publication date: 2 August 2019

Shawkat Hammoudeh, Seong-Min Yoon and Ali Kutan

Motivated by the news media and a lack of comprehensive research on the USA, the purpose of this paper is to examine the relationship between changes in road fatalities…

Abstract

Purpose

Motivated by the news media and a lack of comprehensive research on the USA, the purpose of this paper is to examine the relationship between changes in road fatalities and gasoline prices, per capita disposable personal income, alcohol consumption per adult, blood alcohol concentration (BAC) limits and gender.

Design/methodology/approach

This study employs both static and dynamic panel data models, making use of annual data over the 2000–2013 period collected from the 50 states of the USA and the consistent system GMM estimators of the parameters, to estimate the impact of these variables on fatalities per 100,000 persons and per 100,000 vehicles.

Findings

The results highlight the importance of gasoline prices in determining the level of road fatalities, underscoring that a 10 percent decrease in gasoline prices leads to a 248 increase in the total number of road fatalities, but with many more injuries. Increases in the female-to-total driver ratio have a greater significant positive impact on road fatalities where a 10 percent increase in this ratio increases road fatalities by 1,008 deaths. Increases in registered vehicles per capita also increase the number of fatalities. Other variables such as alcohol consumption per adult and BAC limits are not as important. Policy implications are also provided.

Research limitations/implications

The results of this study highlight the importance of gasoline prices in determining the number of road fatalities. This factor can be an effective policy measure by which policymakers can offset increases in fatalities due to further drastic declines in future gasoline prices. But the effects of the gasoline prices in determining the number of road fatalities are not as strong as the media would lead us to believe. The media ignores the impact of other factors on fatalities, which results in an overestimation of the impact of gasoline prices.

Originality/value

This study uses the panel data of 50 US states and the dynamic panel data model. In addition to gasoline price effects on the road fatalities, this study also considers other factors such as gender, gasoline taxes, per capita disposable personal income, per capita alcohol consumption, BAC limits and number of registered vehicles.

Details

Journal of Economic Studies, vol. 46 no. 3
Type: Research Article
ISSN: 0144-3585

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Case study
Publication date: 20 January 2017

David Besanko and Saahil Malik

Although the federal gasoline tax played multiple roles in financing surface transportation infrastructure in the United States, experts did not agree on the tax's…

Abstract

Although the federal gasoline tax played multiple roles in financing surface transportation infrastructure in the United States, experts did not agree on the tax's purpose. Some argued that it was essentially a fee for users of the nation's federally supported highways. Others suggested that it should play a more prominent role in environmental, energy, and transportation policy by correcting for driving-related externalities. Still others suggested that it should be used to reduce the federal budget deficit. Finally, the tax itself had remained at the same level since 1993, and with the Highway Trust Fund virtually insolvent, many experts believed it was time for an increase. The case presents a background on the U.S. federal gasoline tax, an overview of the market for gasoline in the United States, and survey of gasoline taxes in U.S. states as well as several other countries around the world.

The case can be used to discuss the incidence of the gasoline tax, as well as its role as a Pigouvian tax to deal with negative externalities related to gasoline consumption and driving. There is sufficient data in the case to enable students to analyze the incidence of the federal gasoline tax and to determine the socially efficient level of the tax in light of externalities related to gasoline consumption and driving.

Details

Kellogg School of Management Cases, vol. no.
Type: Case Study
ISSN: 2474-6568
Published by: Kellogg School of Management

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Article
Publication date: 10 January 2019

Hojin Jung, Kyoung-min Kwon and Gun Jea Yu

Using panel data on gasoline and grocery transactions in Korea, the purpose of this paper is to empirically explore the effect of a retail chain store’s establishment of…

Abstract

Purpose

Using panel data on gasoline and grocery transactions in Korea, the purpose of this paper is to empirically explore the effect of a retail chain store’s establishment of on-site fuel sales. The empirical analyses present strong empirical evidence that the sale of fuel had statistically and economically significant effect on retail store traffic and revenue in the short run. However, the effect did not remain significant in the longer run. To explain the dramatic decrease in the effect of the fuel sale, the authors consider the enhanced competition in the local gasoline retail industry and examine cross-sectional price variations at the station level. The results suggest that the increased competition led to the reduction in the price dispersion across stations and thereby to an increase in consumer welfare.

Design/methodology/approach

Using a linear specification that has traditionally been used to model retail chain data, the authors developed a series of difference-in-differences models. This technique is ideal for estimating the effect of a treatment in the presence of possible selection bias and has been widely employed in many social-science studies on policy intervention.

Findings

In a certain environment, introducing fuel sales did not increase retail chain store traffic or revenue in the long run, despite having statistically and economically significant effects in the short run. The results document empirical evidence of myopic management in a common marketing practice, which often leads to a negative impact on the firm value in the long run.

Research limitations/implications

The span of data and sample size were limited to meet the company’s data protection policy.

Practical implications

Considering that many of developed countries are characterized by a gasoline retail environment similar to that which is investigated in this paper, the authors believe that the implications of the results are particularly valid for practitioners and policy makers.

Social implications

The findings document empirical evidence of myopic management in a common marketing practice, which often leads to a negative impact on the firm value in the long run. Marketing researchers should make efforts in establishing metrics to help identify myopic management decision.

Originality/value

This paper addresses an interesting and practical issue related to the effects of the introduction of gasoline sales by a supercenter store on its store traffic.

Details

Asia Pacific Journal of Marketing and Logistics, vol. 31 no. 1
Type: Research Article
ISSN: 1355-5855

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Article
Publication date: 13 May 2014

Audhesh K. Paswan, John C. Crawford, Waros Ngamsiriudom and Thuy Nguyen

The aim of this study is to investigate the impact of increase in price of an essential product (i.e. gasoline) toward the focal product and other seemingly non-related…

Abstract

Purpose

The aim of this study is to investigate the impact of increase in price of an essential product (i.e. gasoline) toward the focal product and other seemingly non-related products.

Design/methodology/approach

A self-administered survey was used to collect data from the drivers at a large metroplex in Southwest USA. Multiple regression and scanning electron microscope procedures were used to analyze and test the proposed hypotheses.

Findings

When consumers notice the increase in gas prices, they become very anxious. This anxiety is positively associated with average gas bought in gallons and negatively associated with threshold price. Further, this consumer anxiety has the strongest influence on lifestyle changes, followed by automobile technology change and transportation mode change, and has the weakest influence on gasoline brand/type change.

Research limitations/implications

We focus on only anxiety as a mediator between increase in gas prices and the behavioral outcomes, and collect data from only one location.

Practical implications

Managers must be cognizant that a price increase in essential goods not only influences the demand for focal products but also for products that may not seem related to the focal products.

Social implications

Increase in gasoline price will not only affect the demand for gasoline, but also the demand for alternate forms of transportation, fuel efficient vehicles, and other aspects of life.

Originality/value

This study is the first to look at the role of anxiety as a mediator and looks at the effects of increase in gas prices in a holistic manner.

Details

Journal of Product & Brand Management, vol. 23 no. 3
Type: Research Article
ISSN: 1061-0421

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Article
Publication date: 27 September 2011

David C. Broadstock, Alan Collins and Lester C. Hunt

The aim of this paper is to establish the role of asymmetric price decompositions in UK road transportation fuel demand, make explicit the impact of the underlying energy…

Abstract

Purpose

The aim of this paper is to establish the role of asymmetric price decompositions in UK road transportation fuel demand, make explicit the impact of the underlying energy demand trend, and disaggregate the estimation for gasoline and diesel demand as separate commodities.

Design/methodology/approach

Dynamic UK transport oil demand functions are estimated using the Seemingly Unrelated Structural Time Series Model with decomposed prices to allow for asymmetric price responses.

Findings

The importance of starting with a flexible modelling approach that incorporates both an underlying demand trend and asymmetric price response function is highlighted. Furthermore, these features can lead to different insights and policy implications than might arise from a model without them. As an example, a zero elasticity for a price‐cut is found (for both gasoline and diesel), implying that price reductions do not induce demand for road transportation fuel in the UK.

Originality/value

The paper illustrates the importance of joint modelling of gasoline and diesel demand incorporating both asymmetric price responses and stochastic underlying energy demand trends.

Details

Journal of Economic Studies, vol. 38 no. 5
Type: Research Article
ISSN: 0144-3585

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Book part
Publication date: 1 July 2004

Robert W Crandall and Kenneth G Elzinga

While the popular image of the Sherman Act is that of a “trust-busting” statute, conduct remedies have been more common than structural relief. This paper evaluates the…

Abstract

While the popular image of the Sherman Act is that of a “trust-busting” statute, conduct remedies have been more common than structural relief. This paper evaluates the effect on economic welfare of conduct remedies that have resulted from ten prominent Sherman Act monopolization cases. In general, we find that in some cases the behavioral relief has had no consequence other than the cost of litigation and cost of compliance; in other cases, the remedies probably reduced consumer welfare. Cases studied are United Shoe Machinery, AT&T, Std. Oil of California, IBM, United Fruit, Kodak, Safeway, GM, Jerrold, and Blue Chip Stamp.

Details

Antitrust Law and Economics
Type: Book
ISBN: 978-0-76231-115-6

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Book part
Publication date: 13 May 2015

Arne Höltl, Matthias Heinrichs and Cathy Macharis

This study analyses the effect of fuel efficiency increase on travel demand in the city of Berlin. Vehicle technologies such as advanced driver assistance systems can help…

Abstract

Purpose

This study analyses the effect of fuel efficiency increase on travel demand in the city of Berlin. Vehicle technologies such as advanced driver assistance systems can help drivers to save fuel and thus lower exhaust emissions on a network level. In order to obtain high political endorsement among different stakeholders, the analysis of such effects which have an impact on overall fuel and emission savings are highly relevant. Recent testing of so called advanced driver assistance systems showed their ability to reduce fuel consumption and lower traffic emissions by giving driving recommendations to drivers.

Methodology/approach

Two effects on driving were simulated using a travel demand model: the increase in fuel prices which will take place in the coming years and a possible increase in vehicle fuel efficiency. Comparing these scenarios allowed us to calculate the effect of price change and the rebound effect of fuel efficiency gains using standard methods for transport elasticities. The simulation was run with the travel demand model TAPAS and the city of Berlin was the network used as a case study.

Findings

As fuel prices increase over time, driving tends to decrease. Driving increases, however, if vehicles become more fuel efficient and the result is the observed rebound effect. On a city network level, this also translates to lower emission savings than expected from the vehicle fuel efficiency gains. The rebound effect which we estimated matches similar findings in the literature, specifically in terms of their magnitude.

Practical implications

We used a simulation to compare scenarios of city travel demand. The result allowed us to estimate changes to the desired variables of fuel efficiency and fuel prices. For those interested in the effects of vehicle efficiency gains on city level these results are highly recommended for consideration.

Originality/value

The proposed framework for analysing rebound effects helped to assess the impacts of energy efficiency technologies on a city level.

Details

Sustainable Urban Transport
Type: Book
ISBN: 978-1-78441-615-7

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Article
Publication date: 6 June 2008

Art Carden

The purpose of this paper is to explore the relationship between beliefs and economic policy in the context of gasoline prices following Hurricane Katrina.

Abstract

Purpose

The purpose of this paper is to explore the relationship between beliefs and economic policy in the context of gasoline prices following Hurricane Katrina.

Design/methodology/approach

The paper applies three contributions – by North, Caplan and Higgs – to the question of gasoline pricing policy; and surveys public opinion regarding interference with prices.

Findings

The paper identifies evidence of “anti‐market bias” in polling data, press releases, and legislation, and argues that the uncertainty emanating from statutes restricting “price gouging” may reduce investment in the provision of “necessary goods and services” after natural disasters.

Originality/value

The paper is of value in offering evidence of anti‐market and anti‐foreign bias among what might be called political first responders to Hurricane Katrina, and posits the view that interference with prices compounded the shortages facing the Gulf coast or any other disaster‐stricken area.

Details

International Journal of Social Economics, vol. 35 no. 7
Type: Research Article
ISSN: 0306-8293

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Article
Publication date: 16 November 2012

Bruce A. Babcock

The purpose of this paper is to examine the market impacts of US biofuels and biofuel policies.

Abstract

Purpose

The purpose of this paper is to examine the market impacts of US biofuels and biofuel policies.

Design/methodology/approach

Two methods of analysis are employed. The first method looks back in time and estimates what US crop prices would have been during the 2005 to 2009 marketing years under two scenarios. The second method of analysis is forward looking and examines the market impacts of the blender tax credit and mandate on the distribution of prices in the 2011 calendar and marketing year.

Findings

The results developed in the previous two sections show that US ethanol policies modestly increased maize prices from 2006 to 2009 and that market impacts of the policies will be larger under tighter market conditions.

Practical implications

More flexible US biofuel policy including removing the blenders tax credit, which does not help US biofuel industry as long as the mandates are in place, and relaxing blending mandates when feedstock supplies are low.

Originality/value

This report makes three contributions to understanding the extent to which US biofuel policies contribute to higher agricultural and food prices. First, estimates of the impact of US ethanol policies on crop and food prices reveal that the impacts of the subsidies were quite modest. The second contribution is to provide estimates of the impact on agricultural commodity prices and food prices from market‐driven expansion of ethanol. The final contribution of this report is improved insight into how current US biofuel policies are expected to affect crop prices in the near future.

Details

China Agricultural Economic Review, vol. 4 no. 4
Type: Research Article
ISSN: 1756-137X

Keywords

Abstract

Details

Journal of Product & Brand Management, vol. 23 no. 3
Type: Research Article
ISSN: 1061-0421

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