Monday, October 7, 2019

Large increases in gasoline prices between the ages of 15-18 significantly reduce the likelihood of driving a private automobile to work & the total annual vehicle miles traveled later in life; also increases public transit use

Formative Experiences and the Price of Gasoline. Christopher Severen & Arthur A. van Benthem. Federal Reserve Bank of Philadelphia Working Paper WP 19-35, September 2019. https://doi.org/10.21799/frbp.wp.2019.3

Abstract: An individual’s initial experiences with a common good, such as gasoline, can shape their behavior for decades. We first show that the 1979 oil crisis had a persistent negative effect on the likelihood that individuals that came of driving age during thistime drove to work in the year 2000 (i.e., in their mid 30s).  The effect is stronger for those with lower incomes and those in cities.  Combining data on many cohorts, we then show that large increases in gasoline prices between the ages of 15 and 18 significantly reduce both (i) the likelihood of driving a private automobile to work and(ii) total annual vehicle miles traveled later in life, while also increasing public transit use.  Differences in driver license age requirements generate additional variationin the formative window.  These effects cannot be explained by contemporaneous in-come and do not appear to be only due to increased costs from delayed driving skill acquisition.  Instead, they seem to reflect the formation of preferences for driving or persistent changes in the perceived costs of driving.

Keywords:  formative experiences, preference persistence, path dependence, drivingbehavior, gasoline price
JEL Codes: D12, D90, L91, Q41, R41

No comments:

Post a Comment