How effective are policies to reduce gasoline consumption? Evaluating a quasi-natural experiment in Spain

• Francisco Javier Asensio Ruiz de Alda ^[1] ; Andrés Gómez-Lobo ^[2] ; Anna Matas i Prat ^[1]
  1. [1] Universitat Autònoma de Barcelona

     Universitat Autònoma de Barcelona

     Barcelona, España

     
  2. [2] Universidad de Chile

     Universidad de Chile

     Santiago, Chile

     
• Localización: Working papers (Universitat Autònoma de Barcelona. Departament d'Economia Aplicada), Nº. 3, 2013
• Idioma: inglés
• Enlaces
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• Resumen

  • Using a panel of 48 provinces for four years we empirically analyze a series of tempo-rary policies aimed at curbing fuel consumption implemented in Spain between Marchand June 2011. The first policy was a reduction in the speed limit in highways. Thesecond policy was an increase in the biofuel content of fuels used in the transportsector. The third measure was a reduction of 5% in commuting and regional trainfares that resulted in two major metropolitan areas reducing their overall fare forpublic transit. The results indicate that the speed limit reduction in highways re-duced gasoline consumption by between 2% and 3%, while an increase in the biofuelcontent of gasoline increased this consumption. This last result is consistent withexperimental evidence that indicates that mileage per liter falls with an increase inthe biofuel content in gasolines. As for the reduction in transit fares, we do not find asignificant effect for this policy. However, in specifications including the urban tran-sit fare for the major cities in each province the estimated cross-price elasticity of thedemand for gasoline –used as a proxy for car use– with respect to the price of transitis within the range reported in the literature. This is important since one of themain efficiency justification for subsidizing public transit rests on the positive valueof this parameter and most of the estimates reported in the literature are quite dated.