High fuel price elasticities for low-mileage households could impact fuel taxation.
The study looked at how changes in fuel prices affect how much people drive in Germany. By using a special method called quantile panel regression, the researchers found that for households with low car mileage, the impact of fuel price on driving is very high. However, this effect decreases quickly for households that drive more. This means that policies like fuel taxes might not have the same impact on all households, depending on how much they drive.