An estimation of fuel demand elasticities for Spain: an aggregated panel approach accounting for diesel share

Abstract

In this paper, an econometric analysis of transport fuel demand elasticities is presented for Spain, for the period 2000 to 2007, giving emphasis to the diesel share of the road transport fleet. Estimation results show a significant impact of the share of diesel powered vehicles, when considering the specific gasoline and diesel demand, but the same does not hold when considering the total fuel demand, where the impact is much lower. In addition, a simple tax reform simulation is carried out, showing that greater savings in CO2 emissions are achievable only on the long run.