Gasoline consumption: Can it be curtailed?

Abstract

Reasons for the current gasoline shortages are many and extremely complex. Basically, the shortages can be attributed to limited supplies while the demand has been steadily increasing for the crude oil by-product. The increased gasoline consumption can be directly traced to some degree to a sharp increase in miles driven and declining efficiency of automobiles. The basic objective of this study was to determine how gasoline consumption can be curtailed. A multiple log-linear regression model with nine variables related to miles driven for various purposes, and automobile efficiency was used to estimate elasticity coefficients. Analysis of 232 observations resulted in highly inelastic coefficients. Based on the results of the analysis, it is fair to conclude that policies directed toward reducing automobile weight, eliminating gas guzzling gadgets, and a pricing strategy avoiding the burden of higher gasoline prices on low income households may help curtail gasoline consumption.