The effects of gasoline price fluctuations on automobile consumer behavior: an empirical analysis using macro data
Date
2008-10
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Abstract
This paper analyzes the effects of oil price fluctuations on the demand for subcompact, compact, executive and large automobile classes. A macroeconomic data set that includes car prices, gasoline prices, disposable income, lagged car sales and interest rates, i employed to provide implications on automobile consumer behavior using an aggregate time series model. A dummy variable is used to account for the structural change in oil prices. The results of the study provide compelling evidence that increasing gasoline prices have a much stronger effect on subcompacts illustrating a shift in the buying preference of consumers from Jess efficient to more fuel-efficient automobiles.
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Keywords
Gasoline price, Fuel pricing, Fuel industry, Automobile, Consumer behavior, Fuel