Household Gasoline Demand in the United States

Continued rapid growth in US gasoline consumption is of particular interest because of various environmental consequences, from increased urban pollution and congestion to overall climate change. For projecting trends in gasoline consumption, one can turn to an extensive econometric literature on gasoline demand, based largely on aggregate data. Results are given from studying household-level data on gasoline consumption. The analysis is motivated by several issues that arise from using existing studies to project secular trends in gasoline consumption. First is the question of whether high income households display the same income elasticity as other households. Second, over periods of a decade or more, age structures and other demographic characteristics may change substantially, and it is reasonable to expect such changes will affect gasoline demand. Data is studied from the Residential Transportation Energy Consumption Survey. These data are discussed, along with the basic modeling framework.