Abstract
It is well acknowledged that gas price negatively affects traffic volume while GDP may have the contrary effect. To gain in-depth understandings of such relationships, this paper collects monthly time series data of freeway traffic, gas price and GDP of Taiwan to examine short- and long-term causal relationships by Granger causality test and cointegration test, respectively. Results show that gas price Granger causes large-vehicle (truck and bus) and trailer traffic, but not small-vehicle traffic. However, there is no statistically significant finding on long-term equilibrium relationship neither between gas price and freeway traffic nor between GDP and freeway traffic.
