Elasticity of transport demand with respect to fuel price

Figure Created 12 Nov 2009 Published 12 Nov 2009 Last modified 29 Nov 2012
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Economic elasticity is the proportional change in one variable relative to the proportional change in another


European data


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For instance, a 1 % increase in fuel price leads to a 0.1 % short-term decrease in vehicle-km. The long-term decrease is higher, namely 0.3 % per vehicle or 0.29 % in total. With a constant or declining occupancy rate, the transport volume in terms of passenger-km decreases at the same rate or faster, respectively. This means that the transport volume from 1990 to 2002, as depicted in the figure above (with the development of fuel prices), would have grown even faster if the fuel prices had stayed at a constant level.

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