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The impact of the fuel price policy on the demand for diesel passenger cars in korean cities

The impact of the fuel price policy on the demand for diesel passenger cars in korean cities
The impact of the fuel price policy on the demand for diesel passenger cars in korean cities

This study forecasts the impact of fuel price policy on the diesel car demand after the permission of domestic sales, using a conjoint analysis based on the stated preference survey from 500 respondents in Seoul and 324 respondents in Ulsan, Korea. The estimation results show that the fuel price elasticity is -0.631 and -0.645 for diesel cars in Seoul and Ulsan, respectively and the elasticity of purchase price are -1.332 and -1.058 for diesel cars in Seoul and Ulsan, respectively. The estimates of the diesel price elasticity indicate that the government planned fuel policy increasing diesel price from the current 70% to 85% of petrol price will decrease the demand for diesel cars by 13.8% to 23.4% when the petrol price is kept at the current price. The estimate of the purchase price elasticity denotes that the obligation of pollutantreducing equipment on diesel cars (about 10% of the sales price) will reduce the demand for diesel cars by 13.3% to 14.7%.

Conjoint analysis, Diesel passenger car, Fuel price policy, Price elasticity, Stated preference
1229-4659
61-73
Kim, Jae Hong
acc8133b-40e5-4101-831b-2413f1d8c5b4
Lee, Seungil
66931b94-8e91-421f-b753-36fa8c6f4261
Preston, John
ef81c42e-c896-4768-92d1-052662037f0b
Kim, Jae Hong
acc8133b-40e5-4101-831b-2413f1d8c5b4
Lee, Seungil
66931b94-8e91-421f-b753-36fa8c6f4261
Preston, John
ef81c42e-c896-4768-92d1-052662037f0b

Kim, Jae Hong, Lee, Seungil and Preston, John (2006) The impact of the fuel price policy on the demand for diesel passenger cars in korean cities. International Review of Public Administration., 10 (2), 61-73. (doi:10.1080/12294659.2006.10805069).

Record type: Article

Abstract

This study forecasts the impact of fuel price policy on the diesel car demand after the permission of domestic sales, using a conjoint analysis based on the stated preference survey from 500 respondents in Seoul and 324 respondents in Ulsan, Korea. The estimation results show that the fuel price elasticity is -0.631 and -0.645 for diesel cars in Seoul and Ulsan, respectively and the elasticity of purchase price are -1.332 and -1.058 for diesel cars in Seoul and Ulsan, respectively. The estimates of the diesel price elasticity indicate that the government planned fuel policy increasing diesel price from the current 70% to 85% of petrol price will decrease the demand for diesel cars by 13.8% to 23.4% when the petrol price is kept at the current price. The estimate of the purchase price elasticity denotes that the obligation of pollutantreducing equipment on diesel cars (about 10% of the sales price) will reduce the demand for diesel cars by 13.3% to 14.7%.

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More information

Accepted/In Press date: 18 January 2006
Published date: January 2006
Keywords: Conjoint analysis, Diesel passenger car, Fuel price policy, Price elasticity, Stated preference

Identifiers

Local EPrints ID: 420033
URI: https://eprints.soton.ac.uk/id/eprint/420033
ISSN: 1229-4659
PURE UUID: 8c8a9bf3-b0d4-4c98-81fe-f7dbb97fd937
ORCID for John Preston: ORCID iD orcid.org/0000-0002-6866-049X

Catalogue record

Date deposited: 25 Apr 2018 16:31
Last modified: 19 Nov 2019 01:45

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