Vehicle choices, miles driven, and pollution policies

Abstract

Mobile sources contribute large percentages of each pollutant, but technology is not yet available to measure and tax emissions from each vehicle. We build a behavioral model of household choices about vehicles and miles traveled. The ideal-but-unavailable emissions tax would encourage drivers to abate emissions through many behaviors, some of which involve market transactions that can be observed for feasible market incentives (such as a gas tax, subsidy to new cars, or tax by vehicle type). Our model can calculate behavioral effects of each such price and thus calculate car choices, miles, and emissions. A nested logit structure is used to model discrete choices among different vehicle bundles. We also consider continuous choices of miles driven and the age of each vehicle. We propose a consistent estimation method for both discrete and continuous demands in one step, to capture the interactive effects of simultaneous decisions. Results are compared with those of the traditional sequential estimation procedure.

Green Infrastructure: The Effects of Urban Rail Transit on Air Quality

“…Recent studies examining taxation of automobile travel include Feng, Fullerton and Gan (2005) and Fullerton and Gan (2005) who study whether second-best taxes on automobile travel can be similarly effective as a first-best tax. Similarly, Parry and Small (2005) study optimal gas taxes and find that gas taxes in the US are lower than the optimal gas tax, but higher in the UK.…”

Can Green Car Taxes Restore Efficiency? Evidence from the Japanese New Car Market

“…The ES program, on the other hand, offered a cash rebate of 100,000 (50,000) yen for purchase of a passenger car (mini-car) if it achieves 15% above the 2010 fuel efficiency standard and the four-star rating on the 2005 emissions standard. 8 Initially, the ES program was scheduled to last until March 31, 2010. However, it was extended to September 30, 2010, as part of the 2010 economic stimulus package.…”

“…The text refers to the requirements for cars sold in FY2009. 8 The cash rebate is increased to 250,000 (125,000) yen for purchase of a passenger car (mini-car) if it replaces old cars aged 13 years or more and meets the 2010 fuel efficiency standard. Because an average year of car ownership in Japan is substantially less than 13 years, we ignore this complication in our analysis.…”

The Rebound Effect for Passenger Vehicles

“…For example, a household may use a small car for a long commute and a large sport utility vehicle (SUV) for local shopping trips. With the exception of Feng et al (2005) and Spiller (2012), econometric analysis of the demand for VMT and gasoline treats each of a household's vehicles as an independent observation.…”

“…Turning to the other two assumptions on consumer behavior, based on the simple model in Section 2 and similar to Feng et al (2005), I account for the effects of the household's other vehicles by controlling for their average fuel economy. Finally, to relax the third assumption, I estimate separate coefficients on gasoline prices and vehicle fuel economy.…”