Transportation
Intro [link]Gasoline Elasticity [link]
Key Points
- Overview of emissions from the transportation sector.
- Comparison of pathways and policies to reduce emissions.
- Estimating demand elasticity difficult due to simultaneity of supply and demand.
- Instrumental variables can help.
- Review three papers using three different methods to estimate the same parameter.
Reading and response questions
Lecture 1
- Read Knittel (JEP 2012)
Response questions
- Compared to electricity markets, do you think it will be easier or harder to reduce CO2 emissions from transportation markets?
- Knittel discusses four channels through which petroleum consumption might be reduced. Which do you think will be the most important over the next decade?
Lecture 2
Read the following two articles.
- Hughes et al_2008
- Davis Kilian 2011 You can skip section 4, “VECTOR AUTOREGRESSIVE MODELS”
Response questions Both papers are trying to estimate the same parameter: the demand elasticity for gasoline.
- Why is it so hard to estimate the elasticity of demand for gasoline?
- Explain two of the empirical strategies attempted in these two articles, in your own words.
Lecture 3
Read the following two articles.
Response questions
- In your own words, explain what these two articles add to the articles we read for last class.