This dissertation explores the impact of gasoline prices and transportation policies on consumer behavior through three separate channels: (1) by affecting the relative operating costs of the vehicles in a household’s garage, (2) through stimulation of vehicle purchases due to the Cash-for-Clunkers policy, and (3) due to the availability and accessibility of high quality public transportation. Each of these channels is explored in a separate chapter.

The first chapter presents a discrete-continuous household vehicle bundle model, where the household’s choice of vehicles and vehicle miles traveled (VMT) is affected by gasoline prices and household and vehicle characteristics. I employ a revealed preference approach that allows for an unlimited choice set, within household vehicle substitution, vehicle specific fixed effects, and unobserved consumer heterogeneity. I use detailed micro-data from the National Household Transportation Survey (NHTS) 2001 and 2009 to explore how different research assumptions affect how elastic households appear to the researcher.

The second chapter analyzes the impact of the Cash-for-Clunkers policy implemented in fall 2009 on vehicle demand, overall emissions, gasoline demand, and job creation. We employ a difference-in-difference estimation technique, using Canada as the control group, and find that the policy overpriced the reduction of emissions relative to other emissions reductions policies.

Finally, the third chapter explores how the availability of public transportation affects how sensitive individuals are to gasoline prices. Through the use of regressions and the NHTS 2001 dataset, we find that living in a city with good public transportation allows individuals to substitute a portion of their VMT, specifically in commuting, from private to public transit options, thus increasing their sensitivity to gasoline prices. We find that a gasoline tax in conjunction with an improvement in public transportation infrastructure could significantly reduce gasoline demand more than just a gasoline tax alone.

There are many factors that affect gasoline and vehicle demand- public policies, household heterogeneity, public transportation availability, and prices. This dissertation explores how different research assumptions and techniques can change how responsive individuals appear to gasoline prices, and analyzes the impact of different transportation policies on overall gasoline and vehicle demand.