Driving Intensity in California: Exploring Spatial Variation in VMT and its Relationship to Fuel Prices, Fuel Economy and the Built Environment

• Environmental and Resource Economics Workshop

Date and Location

Friday, December 7, 2012, 12:10 PM - 1:30 PM
ARE Conference Room, 2102 Social Sciences and Humanities

Abstract

Concerns about air pollution, congestion, and climate change in the U.S. have prompted all levels of government to consider a variety of policies to reduce vehicle dependence and fuel consumption. There are many policy instruments available to address these negative externalities, including gasoline taxes, fuel economy standards, public transportation investments and changes in urban design. This paper aims to inform the policy discussion by examining spatial variation in vehicle miles traveled (VMT) and fuel consumption across zip codes in California. Using a uniquely rich dataset composed of VMT estimates for all vehicles in the state along with data on fuel economy, land use, demographics, fuel prices and measures of local/regional access, a reduced-form analysis is conducted to estimate elasticities for VMT and fuel consumption with respect to fuel economy, fuel prices, public transportation access and characteristics of the built environment. Separate analyses are performed for California as a whole, the San Francisco Bay Area and the South Coast. The methods used incorporate spatial lags of key explanatory variables to capture spillover effects and use spatial autoregressive models to control for any unobserved spatial dynamics. We estimate the short-run price elasticity of gasoline to be -0.25 and suggest that increasing average on-road fuel economy by 10% would reduce fuel consumption in California by 13.8%. Regional results show that vehicle use in the SF Bay area is significantly affected by high densities and use of other transportation modes, while driving behavior in Southern California is largely impacted by accessibility to local and regional amenities.