Auto travel fuel elasticity in a rapidly developing urban area

This paper presents results of a study conducted to quantify the effect of fuel cost increases on household auto travel in Riyadh, the rapidly developing capital of Saudi Arabia. Responses of a stratified random sample of 1648 individual households provided the data base for the analysis. The auto trip measures of shrinkage ratio, arc and log-arc elasticities were calculated for households categorized by income and family size. The elasticity measures suggested the existence of significant relationship among the factors of fuel cost, the number of daily auto trips, and family size. It was found that as fuel prices increased, the number of daily trips decreased, and that this decrease in daily trips was greater with larger family size. A step-wise multiple regression analysis with three independent variables of car ownership, family size, and daily fuel expenditures was developed. The model was fairly accurate in predicting variations in daily household travel. The regression parameter of the variable fuel cost was also used to derive demand elasticity to fuel expenditures. Elasticity measures ranged between -0.30 and -0.37.