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Bounds and Bunching: Distributions of Air Pollutants Produced by New Automobiles

Author

Listed:
  • Josef Montag

    (Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

  • Marek Litzman

    (Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic)

Abstract

Euro norms set limits on per-kilometer emissions of air pollutants produced by new cars. Satisfying these limits is always costly, the existing models generally assume that cars are produced as to just satisfy the norms. This theory predicts bunching of measured emissions below the limits. We find this not to be consistent with the data. In fact, medians of measured emissions are often at around one half or less of the respective limit and are supported by wide distributions. Implications for optimum tax policies are briefly discussed.

Suggested Citation

  • Josef Montag & Marek Litzman, 2015. "Bounds and Bunching: Distributions of Air Pollutants Produced by New Automobiles," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(6), pages 2027-2033.
    • Handle: RePEc:mup:actaun:actaun_2015063062027
    DOI: 10.11118/actaun201563062027
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    References listed on IDEAS

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    1. Ian W. H. Parry & Kenneth A. Small, 2005. "Does Britain or the United States Have the Right Gasoline Tax?," American Economic Review, American Economic Association, vol. 95(4), pages 1276-1289, September.
    2. Montag, Josef, 2015. "The simple economics of motor vehicle pollution: A case for fuel tax," Energy Policy, Elsevier, vol. 85(C), pages 138-149.
    3. Ian W. H. Parry & Margaret Walls & Winston Harrington, 2007. "Automobile Externalities and Policies," Journal of Economic Literature, American Economic Association, vol. 45(2), pages 373-399, June.
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