TRANSPORT GASOLINE DEMAND IN CANADA

A model for gasoline demand by households in Canada is developed. The model identifies and separates the effects of several responses by the household to a change in gasoline prices: driving fewer miles, purchasing fewer cars, and buying more fuel-efficient cars. It also estimates the manufacturers' response of improving the technology of new cars. The size and composition of the fleet is assessed according to the interior volume of four classes of cars rather than their natural weight. The results point to the importance of improving fuel efficiency as an effective means of energy conservation.