This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Tax and Subsidy Combinations for the Control of Car Pollution

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Don Fullerton
Sarah West

Additional information is available for the following registered author(s):

Abstract

Despite technological advances, an individual car's emissions still cannot be measured reliably enough to impose a Pigovian tax. This paper explores alternative market incentives that could be used instead. We solve for second-best combinations of uniform taxes on gasoline, engine size, and vehicle age. For 1,261 individuals and cars in the 1994 Consumer Expenditure Survey, we record the car's model, year, and number of cylinders. We then seek a corresponding car in data from the California Air Resources Board that shows the car's engine size, fuel efficiency, and emissions per mile. We calculate the welfare improvement from a zero-tax scenario to the ideal Pigovian tax, and we find that 71 percent of that gain can be achieved by the second-best combination of taxes on gas, size, and vintage. A gas tax alone attains 62 percent of that gain. These results are robust to variation in the elasticity of substitution among goods.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.nber.org/papers/w7774.pdf
File Format: application/pdf
File Function:
Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7774.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Jul 2000
Date of revision:
Handle: RePEc:nbr:nberwo:7774

Note: PE EEE
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: ().

Related research
Keywords:

Other versions of this item:

Find related papers by JEL classification:
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kohn, Robert E, 1996. "An Additive Tax and Subsidy for Controlling Automobile Pollution," Applied Economics Letters, Taylor and Francis Journals, vol. 3(7), pages 459-62, July. [Downloadable!] (restricted)
  2. Eskeland, Gunnar S, 1994. "A Presumptive Pigovian Tax: Complementing Regulation to Mimic an Emissions Fee," World Bank Economic Review, Oxford University Press, vol. 8(3), pages 373-94, September.
  3. Hoel, Michael, 1998. " Emission Taxes versus Other Environmental Policies," Scandinavian Journal of Economics, Blackwell Publishing, vol. 100(1), pages 79-104, March. [Downloadable!] (restricted)
  4. Anna Alberini & Winston Harrington & Virginia McConnell, 1995. "Determinants of Participation in Accelerated Vehicle-Retirement Programs," RAND Journal of Economics, The RAND Corporation, vol. 26(1), pages 93-112, Spring. [Downloadable!] (restricted)
  5. Molly Espey, 1996. "Explaining the Variation in Elasticity Estimates of Gasoline Demand in the United States: A Meta-Analysis," The Energy Journal, International Association for Energy Economics, vol. 17(3), pages 49-60.
  6. Don Fullerton & Sarah West, 1999. "Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions?," NBER Working Papers 7059, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Small, K.A. & Kazimi, C., 1994. "On the Costs of Air Pollution from Motor Vehicules," Papers 94-95-3, California Irvine - School of Social Sciences.
  8. Jorgenson, Dale W, 1996. "Empirical Studies of Depreciation," Economic Inquiry, Oxford University Press, vol. 34(1), pages 24-42, January.
    Other versions:
  9. Ohta, Makoto & Griliches, Zvi, 1986. "Automobile Prices and Quality: Did the Gasoline Price Increases Change Consumer Tastes in the U.S.?," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(2), pages 187-98, April.
  10. Innes, Robert, 1996. "Regulating Automobile Pollution under Certainty, Competition, and Imperfect Information," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 219-239, September. [Downloadable!] (restricted)
  11. Mayeres, Inge & Proost, Stef, 1997. " Optimal Tax and Public Investment Rules for Congestion Type of Externalities," Scandinavian Journal of Economics, Blackwell Publishing, vol. 99(2), pages 261-79, June. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. De Borger Bruno & Mayeres Inge, 2004. "Taxation of car ownership, car use and public transport: insights derived from a discrete choice numerical optimisation model," Energy, Transport and Environment Working Papers Series ete0413, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment. [Downloadable!]
    Other versions:
  2. Lori Bennear & Robert Stavins, 2007. "Second-best theory and the use of multiple policy instruments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 111-129, May. [Downloadable!] (restricted)
  3. Don Fullerton & Li Gan, 2005. "Cost-Effective Policies to Reduce Vehicle Emissions," NBER Working Papers 11174, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Ye Feng & Don Fullerton & Li Gan, 2005. "Vehicle Choices, Miles Driven, and Pollution Policies," NBER Working Papers 11553, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Don Fullerton & Sarah West, 1999. "Can Taxes on Cars and on Gasoline Mimic an Unavailable Tax on Emissions?," NBER Working Papers 7059, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  6. Garrone Giovanna, 2004. "Scrapping old cars for reducing air pollution: an environmental evaluation of the italian 1997-1998 incentive policy," Department of Economics Working Papers 200404, University of Turin. [Downloadable!]
  7. Don Fullerton & Andrew Leicester & Stephen Smith, 2008. "Environmental Taxes," NBER Working Papers 14197, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Statistics
Access and download statistics

Did you know? IDEAS is also providing many rankings, for example of authors and institutions.

This page was last updated on 2009-12-4.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.