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Vehicle Choices, Miles Driven, and Pollution Policies

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  • Ye Feng
  • Don Fullerton
  • Li Gan

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.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11553.

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Date of creation: Aug 2005
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Publication status: published as Ye Feng & Don Fullerton & Li Gan, 2013. "Vehicle choices, miles driven, and pollution policies," Journal of Regulatory Economics, Springer, vol. 44(1), pages 4-29, August.
Handle: RePEc:nbr:nberwo:11553

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Citations

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Cited by:
  1. Lucas W. Davis & Lutz Kilian, 2008. "The Allocative Cost of Price Ceilings in the U.S. Residential Market for Natural Gas," NBER Working Papers 14030, National Bureau of Economic Research, Inc.
  2. Gilbert E. Metcalf, 2006. "Federal Tax Policy Towards Energy," Discussion Papers Series, Department of Economics, Tufts University 0612, Department of Economics, Tufts University.
  3. X. D'Haultfoeuille & P. Givord & X. Boutin, 2011. "The Environmental Effect of Green Taxation: the Case of the French "Bonus/Malus"," Documents de Travail de la DESE - Working Papers of the DESE g2011-14, Institut National de la Statistique et des Etudes Economiques, DESE.
  4. McManus, Walter, 2006. "Can proactive fuel economy strategies help automakers mitigate fuel price risk?," MPRA Paper 3460, University Library of Munich, Germany.
  5. McManus, Walter, 2007. "Economic analysis of feebates to reduce greenhouse gas emissions from light vehicles for California," MPRA Paper 3461, University Library of Munich, Germany.
  6. Antonio M Bento & Lawrence H Goulder & Emeric Henry & Mark R Jacobsen & Roger H. Von Haefen, 2005. "Distributional and Efficiency Impacts of Gasoline Taxes: An Econometrically Based Multi-market Study," Sciences Po publications info:hdl:2441/10084, Sciences Po.
  7. Lawrence Goulder, 2007. "Distributional and Efficiency Impacts of Increased U.S. Gasoline Taxes," Discussion Papers 07-009, Stanford Institute for Economic Policy Research.
  8. Antonio M. Bento & Lawrence H. Goulder & Mark R. Jacobsen & Roger H. von Haefen, 2009. "Distributional and Efficiency Impacts of Increased US Gasoline Taxes," American Economic Review, American Economic Association, vol. 99(3), pages 667-99, June.
  9. Spiller, Elisheba & Stephens, Heather M., 2012. "The Heterogeneous Effects of Gasoline Taxes: Why Where We Live Matters," Discussion Papers dp-12-30, Resources For the Future.
  10. Yihsu Chen & Alexander Whalley, 2012. "Green Infrastructure: The Effects of Urban Rail Transit on Air Quality," American Economic Journal: Economic Policy, American Economic Association, vol. 4(1), pages 58-97, February.
  11. Bruno De Borger & Ismir Mulalic & Jan Rouwendal, 2013. "Substitution between Cars within the Household," Tinbergen Institute Discussion Papers 13-158/VIII, Tinbergen Institute.
  12. Linn, Joshua, 2013. "The Rebound Effect for Passenger Vehicles," Discussion Papers dp-13-19, Resources For the Future.
  13. Don Fullerton & Li Gan, 2005. "Cost-Effective Policies to Reduce Vehicle Emissions," NBER Working Papers 11174, National Bureau of Economic Research, Inc.
  14. Nazneen Ferdous & Abdul Pinjari & Chandra Bhat & Ram Pendyala, 2010. "A comprehensive analysis of household transportation expenditures relative to other goods and services: an application to United States consumer expenditure data," Transportation, Springer, vol. 37(3), pages 363-390, May.
  15. Gilbert E. Meltcalf, 2007. "Federal Tax Policy towards Energy," NBER Chapters, in: Tax Policy and the Economy, Volume 21, pages 145-184 National Bureau of Economic Research, Inc.
  16. Eskeland, Gunnar S. & Mideksa, Torben K., 2008. "Transportation fuel use, technology and standards: The role of credibility and expectations," Policy Research Working Paper Series 4695, The World Bank.

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