With and without the tracks: how railroad access impacts gas price elasticity

Abstract

Since 2011, gas prices have fallen 43%, raising the question of how different communities adjust their vehicle miles traveled. Data from the National Household Travel Survey’s EPA fuel economy database and the Energy Information Administration database are used to measure consumers’ elasticity to changes in gas prices. We find no significant difference between the price elasticity of individuals in cities with rail access and those without. Furthermore, we are able to rule out an elasticity in those with rail that is greater than 0.61, suggesting that rail access does not make consumer demand elastic.