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Re-Indentifying the Rebound: What About Asymmetry?

Manuel Frondel

Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)

Colin Vance

Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI)

November 12, 2011

USAEE Working Paper No. 11-093

Rebound effects measure the behaviorally induced offset in the reduction of energy consumption following efficiency improvements. Using panel estimation methods and household travel diary data collected in Germany between 1997 and 2009, this study identifies the rebound effect in private transport by allowing for the possibility that fuel price elasticities – from which rebound effects can be derived – are asymmetric. This approach rests on evidence that has emerged from the empirical literature suggesting that the response in individual travel demand to price increases is stronger than to decreases. Such an asymmetric response would necessitate reference to the fuel price elasticity derived from price decreases in order to identify the rebound effect, as the rebound occurs in response to a decrease in unit cost for car travel due to improved fuel efficiency. While we fail to reject the hypothesis that the magnitude of the response to a price increase is equal to that of a price decrease, our rebound effect estimate for single-vehicle households of 58% is in line with a recent German study by Frondel, Peters, and Vance (2008).

Number of Pages in PDF File: 28

Keywords: Automobile travel, Panel Estimation Models

JEL Classification: D13, Q41

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Date posted: November 13, 2011  

Suggested Citation

Frondel, Manuel and Vance, Colin, Re-Indentifying the Rebound: What About Asymmetry? (November 12, 2011). USAEE Working Paper No. 11-093. Available at SSRN: https://ssrn.com/abstract=1958689 or http://dx.doi.org/10.2139/ssrn.1958689

Contact Information

Manuel Frondel (Contact Author)
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) ( email )
Hohenzollernstraße 1-3
0049 (0)201 8149 204 (Phone)
Colin Vance
Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI) ( email )
Hohenzollernstr. 1-3
Essen, 45128
0049-201-8149-237 (Phone)
HOME PAGE: http://www.rwi-essen.de
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