Doing My Part to Save the Global Commons? Environmental Awareness and Voluntary Fuel Economization in Gasoline Markets

Abstract

Information about collectively-created problems, such as air pollution, may elicit voluntary changes to consumer behavior that at least partially offset the cause of the problem. We show that increases in information about climate change are associated with statistically and economically significant decreases in expenditure on gasoline, controlling for gasoline prices and income. We simultaneously provide updated estimates of the short run price and income elasticities of demand for gasoline in the US, utilizing recent weekly gasoline consumption and price data and spatially-delineated supply side disruptions due to hurricanes as an instrument for price.