Identifying the Rebound: Theoretical Issues and Empirical Evidence from a German Household Panel
28 Pages Posted: 13 Mar 2007
Date Written: February 2007
Using a panel of household travel diary data collected in Germany between 1997 and 2005, this study assesses the effectiveness of fuel efficiency improvements by econometrically estimating the rebound effect, describing the extent to which higher efficiency causes additional travel.Following a theoretical discussion outlining three alternative definitions of the rebound effect, the econometric analysis generates corresponding estimates using panel methods to control for the effects of unobservables that could otherwise produce spurious results. Our results, which range between 56% and 66%, indicate a rebound that is substantially larger than obtained in other studies, calling into question the efficacy of recently implemented measures in the European Union targeted at technological innovations in the automotive sector.
Keywords: Household production, rebound effect, panel models
JEL Classification: D13, Q41
Suggested Citation: Suggested Citation