## Wednesday, September 10, 2014

### Problem Set Three: Household Vehicle Use for Multi-Vehicle Households

This problem set considers vehicle use by a household with one vehicle and the potential impact of the purchase of a second vehicle.   One of the issues addressed in these math problems involves the extent to which multi-vehicle households might alter their behavior when the price of gasoline changes.

Economists argue that the introduction of fuel efficient vehicles will often lead to an increase in the amount people travel which reduces the fuel savings obtained from the new technology.   However, cars are often the only way to get anywhere. In my view, this outcome, called the rebound effect, is more likely for households that have more than one vehicle.

these problems may have some insight on the rebound effect for multi-vehicle households.

Question One:  Consider a household that owns a Ford F Series Truck with fuel efficiency of 18 mpg.    The household travels 15000 miles per year.  How much gasoline does the household consume?

Question Two:  The household buys a second vehicle a Ford Focus with EPA gas mileage of 31 mpg.   Household vehicle miles traveled increases to 23,000 miles.  What percent of miles traveled in the Ford Focus will leave the household consumption of gasoline unchanged?

Question Three:  Consider a household with a Ford Focus and the Ford F Series Truck, which travels 30,000 miles per year.    Calculate fuel consumption when driving is 75% F-Series and 25% Focus and when driving is 25% F-Series and 75% Focus?  What is expenditure on fuel given these driving patterns when gasoline is \$3.50 per gallon and when gasoline is \$5.00 per gallon?

Question Four:  Explain why vehicle miles traveled in a multi-car household might be less sensitive to the price of gasoline than vehicle miles traveled in a household that only owns one car?  (This last question is more subtle than it initially appears.)

Students who want help on the math for this post might look at some of my previous problems.