Should Diesel Cars in Europe be discouraged ?
This paper examines the rationale for the different tax treatment of gasoline and diesel cars currently observed in Europe. First, we analyse possible justifications for a different tax treatment: pure tax revenue considerations, externality considerations and constraints on the tax instruments used for cars and trucks. Next, an applied general equilibrium model is used to assess the welfare effects of revenue neutral changes in the vehicle and fuel taxes on diesel and gasoline cars. The model integrates the effects on tax revenue, environmental externalities, road congestion, accidents and income distribution.
|Date of creation:||Mar 2000|
|Date of revision:|
|Contact details of provider:|| Web page: http://feb.kuleuven.be/Economics/|
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- Frank Verboven, 1996. "International Price Discrimination in the European Car Market," RAND Journal of Economics, The RAND Corporation, vol. 27(2), pages 240-268, Summer.
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Working Papers Department of Economics
ces9832, KU Leuven, Faculty of Economics and Business, Department of Economics.
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- Mayeres, Inge & Proost, Stef, 1997. " Optimal Tax and Public Investment Rules for Congestion Type of Externalities," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(2), pages 261-79, June.
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