IDEAS home Printed from https://ideas.repec.org/a/sae/enejou/v37y2016i3p315-342.html

What is the Effect of Fuel Efficiency Information on Car Prices? Evidence from Switzerland

Author

Listed:
  • Anna Alberini
  • Markus Bareit
  • Massimo Filippini

Abstract

Inadequate information is often identified as a potential cause for the so-called “energy efficiency gap,†i.e., the sluggish pace of investment in energy efficiency technologies, which potentially affects a wide variety of energy-using goods, including road vehicles. To improve the fuel economy of vehicles, in 2003 Switzerland introduced a system of fuel economy and CO2 emissions labels for new passenger cars, based on grades from A (best) to G (worst). We have data for all cars approved for sale in Switzerland from 2000 to 2011. Hedonic regressions suggest that there is a fuel-economy premium, but do not allow us to identify whether the fuel economy label has an additional effect on car price, above and beyond the effect of fuel economy. To circumvent this problem, we turn to a sharp regression discontinuity design based on the mechanism used by the government to assign cars to the fuel economy label, which estimates the effect of the A label on price to be 6-11%. Matching estimators find this effect to be 5%.

Suggested Citation

  • Anna Alberini & Markus Bareit & Massimo Filippini, 2016. "What is the Effect of Fuel Efficiency Information on Car Prices? Evidence from Switzerland," The Energy Journal, , vol. 37(3), pages 315-342, July.
    • Handle: RePEc:sae:enejou:v:37:y:2016:i:3:p:315-342
    DOI: 10.5547/01956574.37.3.aalb
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5547/01956574.37.3.aalb
    Download Restriction: no
    File URL: https://libkey.io/10.5547/01956574.37.3.aalb?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Cristian Huse & Claudio Lucinda, 2014. "The Market Impact and the Cost of Environmental Policy: Evidence from the Swedish Green Car Rebate," Economic Journal, Royal Economic Society, vol. 124(578), pages 393-419, August.
    2. Matthew J. Kotchen, 2009. "Voluntary Provision of Public Goods for Bads: A Theory of Environmental Offsets," Economic Journal, Royal Economic Society, vol. 119(537), pages 883-899, April.
    3. Michael Greenstone & Elizabeth Kopits & Ann Wolverton, 2013. "Developing a Social Cost of Carbon for US Regulatory Analysis: A Methodology and Interpretation," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 23-46, January.
    4. Jonathan Murray & Nicholas Sarantis, 1999. "Price-Quality Relations and Hedonic Price Indexes for Cars in the United Kingdom," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 6(1), pages 5-27.
    5. Jacobsen, Grant D. & Kotchen, Matthew J. & Vandenbergh, Michael P., 2012. "The behavioral response to voluntary provision of an environmental public good: Evidence from residential electricity demand," European Economic Review, Elsevier, vol. 56(5), pages 946-960.
    6. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    7. Hunt Allcott & Michael Greenstone, 2012. "Is There an Energy Efficiency Gap?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 3-28, Winter.
    8. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769, December.
    9. Arguea, Nestor M. & Hsiao, Cheng, 1993. "Econometric issues of estimating hedonic price functions : With an application to the U.S. market for automobiles," Journal of Econometrics, Elsevier, vol. 56(1-2), pages 243-267, March.
    10. Anna Matas & Josep-Lluis Raymond, 2009. "Hedonic prices for cars: an application to the Spanish car market, 1981-2005," Applied Economics, Taylor & Francis Journals, vol. 41(22), pages 2887-2904.
    11. Robert Witt, 1997. "The demand for car fuel efficiency: some evidence for the UK," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1249-1254.
    12. Robert G. Ethier & Gregory L. Poe & William D. Schulze & Jeremy Clark, 2000. "Comparison of Hypothetical Phone and Mail Contingent Valuation Responses for Green-Pricing Electricity Programs," Land Economics, University of Wisconsin Press, vol. 76(1), pages 54-67.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:aen:journl:ej37-3-alberini is not listed on IDEAS
    2. Anna Alberini & Markus Bareit & Massimo Filippini, 2014. "Does the Swiss Car Market Reward Fuel Efficient Cars? Evidence from Hedonic Pricing Regressions, a Regression Discontinuity Design, and Matching," Working Papers 2014.16, Fondazione Eni Enrico Mattei.
    3. Anna Alberini & Massimo Filippini & Markus Bareit, 2014. "Does the Swiss Car Market Reward Fuel Efficient Cars? Evidence from Hedonic Pricing Regressions, Matching and a Regression Discontinuity Design," CER-ETH Economics working paper series 14/190, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    4. Giuliano Rolle, 2022. "Between and within vehicle models hedonic analyses of environmental attributes: the case of the Italian used-car market," SEEDS Working Papers 0822, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2022.
    5. Arnab Mitra & Michael R. Moore, 2018. "Green Electricity Markets as Mechanisms of Public-Goods Provision: Theory and Experimental Evidence," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(1), pages 45-71, September.
    6. Vergolini, Loris & Zanini, Nadir, 2015. "Away, but not too far from home. The effects of financial aid on university enrolment decisions," Economics of Education Review, Elsevier, vol. 49(C), pages 91-109.
    7. Ramírez Muñoz de Toro, Gonzalo R. & Uriarte, Juan I. & Delbianco, Fernando & Larrosa, Juan M.C., 2017. "Un modelo hedónico de precios en línea de automóviles usados en Argentina || A Hedonic Model of Online Prices of Used Cars in Argentina," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 24(1), pages 25-53, Diciembre.
    8. Luís Felipe Batista de Oliveira & Rafael Terra, 2016. "Impact of school day extension on educational outcomes: evidence from Mais Educação in Brazil," One Pager 329, International Policy Centre.
    9. Jacobsen, Grant D., 2015. "Do energy prices influence investment in energy efficiency? Evidence from energy star appliances," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 94-106.
    10. Kiesewetter, Dirk & Manthey, Johannes, 2017. "The relationship between corporate governance and tax avoidance - evidence from Germany using a regression discontinuity design," arqus Discussion Papers in Quantitative Tax Research 218, arqus - Arbeitskreis Quantitative Steuerlehre.
    11. Grieder, Manuel & Baerenbold, Rebekka & Schmitz, Jan & Schubert, Renate, 2022. "The Behavioral Effects of Carbon Taxes – Experimental Evidence," VfS Annual Conference 2022 (Basel): Big Data in Economics 264112, Verein für Socialpolitik / German Economic Association.
    12. Zhong, Hai, 2016. "Effects of quantity of education on health: A regression discontinuity design approach based on the Chinese Cultural Revolution," China Economic Review, Elsevier, vol. 41(C), pages 62-74.
    13. Pavan, Giulia, 2017. "Green Car Adoption and the Supply of Alternative Fuels," TSE Working Papers 17-875, Toulouse School of Economics (TSE).
    14. Gregory J. Wawro & Ira Katznelson, 2020. "American political development and new challenges of causal inference," Public Choice, Springer, vol. 185(3), pages 299-314, December.
    15. Adam, Antonis & Tsarsitalidou, Sofia, 2022. "The effect of international development association's (IDA) aid on conflict. A fuzzy regression discontinuity approach," European Journal of Political Economy, Elsevier, vol. 74(C).
    16. Mauricio Villamizar‐Villegas & Freddy A. Pinzon‐Puerto & Maria Alejandra Ruiz‐Sanchez, 2022. "A comprehensive history of regression discontinuity designs: An empirical survey of the last 60 years," Journal of Economic Surveys, Wiley Blackwell, vol. 36(4), pages 1130-1178, September.
    17. David Prentice & Xiangkang Yin, 2000. "Measuring Quality-Adjusted Inflation Rates for a Heterogeneous Oligopoly," Working Papers 2000.06, School of Economics, La Trobe University.
    18. Ahlfeldt, Gabriel M. & Nitsch, Volker & Wendland, Nicolai, 2019. "Ease vs. noise: Long-run changes in the value of transport (dis)amenities," Journal of Environmental Economics and Management, Elsevier, vol. 98(C).
    19. Ek, Claes & Miliute-Plepiene, Jurate, 2018. "Behavioral spillovers from food-waste collection in Swedish municipalities," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 168-186.
    20. Peter Hull & Michal Kolesár & Christopher Walters, 2022. "Labor by design: contributions of David Card, Joshua Angrist, and Guido Imbens," Scandinavian Journal of Economics, Wiley Blackwell, vol. 124(3), pages 603-645, July.
    21. Eva Dettmann & Matthias Brachert & Mirko Titze, 2016. "Identifying the Effects of Place-Based Policies - Causal Evidence from Germany," CESifo Working Paper Series 5901, CESifo.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:enejou:v:37:y:2016:i:3:p:315-342. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.