A Model for Forecasting Passenger Car Gasoline Demand

Abstract

This paper presents the National Energy Board’s model to forecast gasoline consumption by passenger automobiles. This model is part of NEB’s energy forecasting system (Preece, Harsanyi, and Webster, this volume), and it has also been used by the Alberta Energy Resources Conservation Board. The model consists of behavioral equations for per capita new car sales, the market share intermediate and standard cars, scrappage rates, and the average annual mileage per car. The exogenous variables in the model include fuel economies, car prices, gasoline prices, the proportions of miles traveled on urban and non-urban roads, the average and maximum life of cars, and other demographic and macroeconomic variables. The model may be used to forecast gasoline consumption and to simulate the effects on gasoline consumption of changes in the exogenous variables which may reflect economic conditions such as increasing incomes; technical changes such as those which affect vehicle life; or policy changes such as the setting of fuel economy standards.

This reserach was supervised by Dr. Peter Eglington and Mr. Les Harsanyi. We are thankful to Dr. Munir Sheikh for several helpful hints.