Disaggregate Analysis of Gasoline Consumption Demand of Greek Households

Abstract

The expenditure on private vehicle usage is an important aspect of the budget allocation process of households, which has important implications for the sustainable urban development and transport, energy and environmental policy making. This paper examines the gasoline consumption demand of Greek households using cross-sectional micro-data from a country-wide Household Budget Survey (HBS) during the period 2004/05. The two-step Heckman modeling methodology is adopted to jointly estimate the probability of selecting to use private vehicle and the amount of using it. In this way, it can help to identify and better explain factors for which some private vehicle owners/holders do (not) actually consume that mode.

The results offer valuable insight into the existence of feedback relationship between the decision-making mechanisms of selecting to use private vehicle and amount of usage, in terms of the amount of money spent for gasoline consumption. They also indicate the statistically significant impact of region-specific fixed effects, which implies that unobserved or omitted factors associated with each Region have a different impact on the decision to choose and the amount of using private vehicle. The income variable has a statistically significant positive impact on the selection and usage of a private vehicle. The estimated income elasticity suggests that a private vehicle travel is relatively inelastic (normal and necessity good). Its value reflects the increased car dependence and it is within the range of other income elasticities found in the literature.

The male gender of household head, the amount of cars owned, the participation of family members in the labour market, the family size (a single-parent or couples with at least one child older than 18 years-old) and the expenditure on communication and tourism increase the probability of private vehicle gasoline consumption. The latter finding verifies that private vehicle constitutes an important means of transport during vacation. The use of communication devices, especially a mobile phone, reinforces the use of private vehicle, as it weakens the need for short-range activity planning in advance and the range and extent of social networking.

On the contrary, the high population densities, the connection to the internet and the aging of household head reduce the probability of private vehicle gasoline consumption. The above results signify the role of personal and intra-household constraints, mostly related to size and aging structure, on the selection and use of a private vehicle.

The expenditure on most other transport categories, such as an urban public transport, taxi, coach and rail negatively and statistically significantly affect private vehicle gasoline consumption. This outcome stresses the competitive relationship between the private vehicle and other transport modes which are mainly used in urban areas (urban bus, metro, and taxi).

The study findings suggest the design of more sustainable leisure travel services, focussed on upgrading the quality of public transport modes servicing tourist resort areas. Policy measures to manage private vehicle use must be spatially targeted, accounting for the local climate, residential densities, infrastructure and accessibility conditions and the service quality of alternative modes in each Region. These measures can be supplemented with the adoption of suitable information and communication technologies to reduce the demand for private vehicle travel and increase the level of public transport services, as well as investments in clean vehicle technologies.

DOI: http://dx.doi.org/10.5755/j01.ee.23.1.1226