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Equity Implications of Vehicle Emissions Taxes

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  • Sarah E. West

Abstract

This paper considers the equity implications of vehicle emissions taxes by examining the incidence of a tax on local pollutants. It uses emissions data from the California Air Resources Board and household vehicle and income data from the US Consumer Expenditure Survey. It incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden. Since poor vehicle owners spend more on miles as a proportion of their income and drive vehicles that pollute more per mile than those owned by the wealthy, the incidence of tax on vehicle emissions falls relatively heavily on them. This burden, however, is mitigated to some extent by low vehicle ownership rates and high price responsiveness in the lower half of the income distribution. A uniform tax on miles that does not distinguish between dirty and clean vehicles is less regressive than the emissions tax. © 2005 LSE and the University of Bath

Suggested Citation

  • Sarah E. West, 2005. "Equity Implications of Vehicle Emissions Taxes," Journal of Transport Economics and Policy, University of Bath, vol. 39(1), pages 1-24, January.
  • Handle: RePEc:tpe:jtecpo:v:39:y:2005:i:1:p:1-24
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    Cited by:

    1. repec:eee:retrec:v:62:y:2017:i:c:p:2-10 is not listed on IDEAS
    2. Christopher R. Knittel & Ryan Sandler, 2013. "The Welfare Impact of Indirect Pigouvian Taxation: Evidence from Transportation," NBER Working Papers 18849, National Bureau of Economic Research, Inc.
    3. Tovar Reaños, Miguel A. & Sommerfeld, Katrin, 2018. "Fuel for inequality: Distributional effects of environmental reforms on private transport," Resource and Energy Economics, Elsevier, vol. 51(C), pages 28-43.
    4. Parry, Ian & Walls, Margaret & Sigman, Hilary & Williams III, Roberton, 2005. "The Incidence of Pollution Control Policies," Discussion Papers dp-05-24, Resources For the Future.
    5. Rafael Aigner, 2014. "Environmental Taxation and Redistribution Concerns," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 70(2), pages 249-277, June.
    6. Gruber, Robert, 2012. "Evaluation of the effectiveness of the German Federal Government with respect to sustainable mobility: Analyse rechtlicher, fiskalpolitischer und softer Maßnahmen auf Bundesebene," Wuppertaler Studienarbeiten zur nachhaltigen Entwicklung, Wuppertal Institute for Climate, Environment and Energy, volume 4, number 4.
    7. Starr McMullen, B. & Zhang, Lei & Nakahara, Kyle, 2010. "Distributional impacts of changing from a gasoline tax to a vehicle-mile tax for light vehicles: A case study of Oregon," Transport Policy, Elsevier, vol. 17(6), pages 359-366, November.
    8. Berri, Akli & Vincent Lyk-Jensen, Stéphanie & Mulalic, Ismir & Zachariadis, Theodoros, 2014. "Household transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation for France, Denmark and Cyprus," Transport Policy, Elsevier, vol. 36(C), pages 206-216.
    9. England, Richard W., 2007. "Motor fuel taxation, energy conservation, and economic development: A regional approach," Ecological Economics, Elsevier, vol. 61(2-3), pages 409-416, March.
    10. repec:eee:eneeco:v:70:y:2018:i:c:p:84-97 is not listed on IDEAS
    11. Berri, Akli & Vincent Lyk-Jensen, Stéphanie & Mulalic, Ismir & Zachariadis, Theodoros, 2014. "Household transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation for France, Denmark and Cyprus," Transport Policy, Elsevier, vol. 36(C), pages 206-216.
    12. McMullen, B. Starr & Zhang, Lei, 2007. "Is A Vehicle-Mile Tax a Viable Alternative to the Gasoline Tax? A Review of Socio-Economics and Distributional Considerations," 48th Annual Transportation Research Forum, Boston, Massachusetts, March 15-17, 2007 207933, Transportation Research Forum.
    13. Yang, Di & Kastrouni, Eirini & Zhang, Lei, 2016. "Equitable and progressive distance-based user charges design and evaluation of income-based mileage fees in Maryland," Transport Policy, Elsevier, vol. 47(C), pages 169-177.

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