Modelling Fuel Demand of Passenger Cars in Spain<BR> A Dynamic Panel Data Analysis Using the Generalised Method of Moments

This paper identifies the main determinants of fuel consumption by households in the passenger transport sector in Spain (private cars). We estimate a Generalised Method of Moments model using quarterly (panel) data on automotive fuel consumption by 8,000 households between 1998 and 2005. The paper shows a clear persistence of habit in fuel consumption and a strong, statistically significant relationship between household transport fuel consumption and income, price of public transport, and fuel prices. In addition, consumption is significantly related to household size, the geographical location of the household, and whether the breadwinner is an employer and an employee. © 2014 LSE and the University of Bath