welfare effects of distortionary fringe benefits taxation the case of employer provided cars in europe many employees receive company cars as fringe benefits induced by taxation we analyze the welfare effects of company car taxation for the netherlands by estimating to what extent car expenditure and private car travel change when employees receive a company car tax treatment of company cars generates an annual welfare loss ranging from 600 to 780 per company car mainly due to a shift toward more expensive cars from 420 to 600 but also due to increased private travel 180 for the whole of europe the annual welfare loss is about 12 billion 2011 by the economics department of the university of pennsylvania and the osaka university institute of social and economic research association

the welfare effects of fuel conservation policies in a dual fuel car market evidence from india we estimate a model of vehicle choice and kilometers driven to analyze the long run impacts of fuel conservation policies in the indian car market we simulate the effects of petrol and diesel fuel taxes and a diesel car tax taking into account their interactions with the pre existing petrol fuel tax and car sales taxes at levels sufficient to reduce total fuel consumption by 7 the increased diesel and petrol fuel taxes both yield deadweight losses net of externalities of about 4 2010 rs l however at levels sufficient to reduce total fuel consumption by 2 the increased petrol fuel tax results in a deadweight loss per liter of fuel conserved that is greater than that caused by the diesel fuel tax this reflects both the high pre existing tax on petrol fuel and the high own price elasticities of fuel demand in india a tax on diesel cars that results in the same diesel market share as the large diesel fuel tax actually has a negative deadweight loss per liter of fuel conserved the welfare effects of all three policy instruments are positive once the external benefits of reducing fuel consumption are added to the excess burden of taxation

distributional effects of a carbon tax on car fuels in france this paper analyses the distributional effects of alternative scenarios of carbon taxes on car fuels using disaggregated french panel data from 2003 to 2006 it incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden carbon taxation is regressive before revenue recycling however taking into account the benefits from congestion reduction induced by the tax mitigates regressivity we show also that recycling additional revenues from the carbon tax either in equal amounts to each household or according to household size makes poorest households better off

optimal taxation and cross price effects on labor supply estimates of the optimal gas tax abstract this study estimates parameters necessary to calculate the optimal second best gasoline tax most notably the cross price elasticity between gasoline and leisure prior theoretical work indicates the importance of this elasticity but despite this almost none of the prior studies of commodity taxation and none of the studies on second best environmental regulation actually estimate it using household data we find that gasoline is a relative complement to leisure and thus that the optimal gasoline tax is significantly higher than marginal damages the opposite of the result suggested by the bulk of the prior literature indeed even if there were no externalities at all associated with gasoline the optimal tax rate would still be almost equal to the average gas tax rate in the u s following this approach to estimate cross price elasticities with leisure could strongly influence estimates of optimal rates for other important commodity or pollution taxes

impacts of long range increases in the fuel economy cafe standard i introduction and background in 1975 the u s government enacted legislation regulating the fuel efficiency of new motor vehicles the apparent objective of this law is to reduce american dependence on foreign oil after large increases in the price of petroleum in the late 1990s and with continued conflict in the middle east corporate average fuel economy cafe standards once again became a topic of interest a number of proposals for changing the cafe standards were discussed in congress in early 2002 culminating in a defeat in the senate of an amendment that would have required a 50 increase in the relevant cafe standards in place of that increase the senate voted to require the executive branch to examine the impact of further increases in the cafe standard this work evaluates the long term economic implications of raising the standard by 3 0 miles per gallon mpg above current levels in industry parlance this approach is sometimes referred to as technology forcing i choose 3 0 mpg because it reflects the focus of a may 2001 report by the vice president s task force on energy policy and because it reflects several legislative proposals in congress 1 the long term refers to a length of time such that manufacturers can adjust vehicle technologies and powertrain designs to reduce the amount of fuel required to move a given amount of mass or to achieve a given amount of performance or acceleration per gallon of fuel consumed previous work on cafe standards such as kleit 1990 and thorpe 1997 focused on short term responses to higher cafe standards where technology forcing was not an option for manufacturers the analysis is conducted under two different scenarios the first scenario is that cafe standards are not binding in the current marketplace the second scenario takes account of the current impact of cafe standards and then analyzes the costs and benefits of increasing the standards the costs of cafe standards are broken down into two areas the changes in consumer and producer surplus and the increase in externalities caused by the increased driving that higher cafe standards induce the plan of this article is as follows section ii reviews the history of cafe standards and briefly discusses the rationale for the regulation section iii develops a model in which the current cafe standard is assumed to be nonbinding section iv provides estimates of the impacts for a long term 3 0 mpg cafe increase under the assumption that the current standard is not binding section v then revises the model to take into account the arguably more realistic assumption that the existing cafe standard was in fact binding it then reports estimates for a long term 3 0 mpg increase section vi provides a brief cost benefit analysis of cafe increases and section vii provides a summary and conclusion ii background on automobile fuel economy standards a brief history of the cafe program the cafe program as enacted in 1975 called for all manufacturers selling more than 10 000 autos per year in the united states to reach the mandated cafe levels cafe levels rose from 19 0 mpg in 1978 to 27 5 mpg in 1985 and later years a manufacturer s domestic and foreign cars are placed in separate cafe categories based on the domestic context of the vehicle if a car has over 75 american context it is considered domestic and placed in the domestic pool otherwise it is placed in the foreign car pool see kleit 1990 for a discussion light trucks pickup trucks sport utility vehicles suvs and minivans were placed in a different cafe pool than cars when cafe standards were originally passed these vehicles represented a small fraction of the relevant market by 2001 however such vehicles made up approximately one half of the sales of personal vehicles in 2001 light trucks were required to reach 20 7 mpg there is no domestic and foreign division in the cafe regulation for light trucks

serial nonparticipation in repeated discrete choice models we consider alternative econometric strategies for addressing serial nonparticipation that is repeated choice of the same alternative or same type of alternative across a series of choice occasions in data typically analyzed within the repeated discrete choice framework single and double hurdle variants of the repeated discrete choice model are developed and applied to choice experiment and multisite seasonal recreation demand data our results suggest that hurdle models can generate significant improvements in statistical fit and qualitatively different policy implications particularly in choice experiment applications where the proper treatment of serial nonparticipation is relatively more ambiguous

clearing the air the costs and consequences of higher cafe standards and increased gasoline taxes abstract concerns about energy security and climate change have sparked legislators interest in reducing gasoline consumption by increasing corporate average fuel economy cafe standards using an empirically rich simulation model and cost estimates for anticipated fuel economy technologies we estimate annual costs of reducing long run gasoline consumption by 10 via a 3 8 miles per gallon increase in the standards and the potential cost savings from allowing manufacturers to buy and sell fuel economy credits maximum gasoline savings would be realized only after all existing vehicles were replaced or 14 years in our model a gasoline tax would produce greater immediate savings by encouraging people to drive less and eventually to choose more fuel efficient vehicles we demonstrate the advantage of a tax by comparing the cost of the higher cafe standards over the first 14 years against the cost of a gasoline tax that would save the same amount of gasoline over that time

design and implementation of carbon cap and dividend policies an important concept in discussions of carbon management policies is cap and dividend where some fraction of the revenues of an auction on emission allowances is returned to citizens on an equal per capita basis this policy tool has some important features it emphasizes the fact that the atmosphere is a common property resource and it is a highly transparent measure that can be effectively used to protect the income of low income individuals in this paper we examine this policy in the california context and focus on the costs and impacts of a cap and dividend scheme when applied to carbon emissions associated with electricity natural gas and transportation services we find that cap and dividend can effectively be used to address the economic impacts of carbon management policies making them progressive for the lowest income members of society we find that the majority of households receive positive net benefits from the policy even with the government retaining half of the auction revenue if auction revenues are instead dedicated only to low income households the majority of low income households can be fully compensated even with the state government retaining upwards of 90 of auction revenues for other purposes

distributional effects of taxing transport fuel this paper1 takes as its starting point the observation that fuel prices and thus taxes are important for good management of climate change and other environmental problems to economists this should be no surprise yet it seems that the role of fuel taxation as an instrument of climate policy has not been fully appreciated it is however one of the few policy instruments that since several decades has actually reduced fuel consumption appreciably thanks to taxation mainly in europe and japan carbon emissions are considerably lower than they would have been otherwise in future where carbon emissions are to be cut drastically this instrument will be crucial there is however much opposition to the instrument this opposition uses various arguments for instance that fuel taxes hurt the poor since they are strongly regressive we however find that the choice of country and methodology turns out to be of great consequence we study seven european countries france germany united kingdom italy serbia spain and sweden and do find some evidence of regressivity but the evidence is very weak it does not apply when lifetime income is used and it does not apply to the poorest country in the group the best one line summary is probably that the tax is approximately proportional

the competitive dynamics of new dvd releases we study the market for new movie dvds in the united states our demand model captures seasonality freshness i e time between theatrical and dvd release and state dependence we also develop a structural model of dynamic competition in which studios balance waiting for high demand weeks against reduced freshness and against competitive crowding we find that studios emphasize dvd revenues from larger movies by theatrical revenue over dvd revenues from smaller movies studios also emphasize revenue from consumers who prefer larger and fresher movies these behaviors are consistent with managerial conservatism studio executives forgo dvd revenues from smaller movies to ensure the dvd success of larger movies this paper was accepted by j miguel villas boas marketing

value of time speeding behavior and gasoline prices abstract value of time vot is a key parameter in economics and policy this paper presents an alternative method to estimate vot by analyzing an hourly dataset on drivers speeding behavior as a function of the gasoline price our identification strategy is novel as it is based on the intensive margin in comparison previous studies reveal vot on the extensive margin but choice alternatives have multiple attributes thereby potentially confounding estimates consistent with the range of the prior literature we find a vot of about 50 of the wage rate and analyze sources of bias from accidents and traffic tickets these bias functions suggest that previous stated preference vot estimates are likely downward whereas previous revealed preference estimates are likely upward biased

anticipation tax avoidance and the price elasticity of gasoline demand summary least squares estimates of the response of gasoline consumption to a change in the gasoline price are biased toward zero given the endogeneity of gasoline prices a seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes but this approach tends to yield implausibly large price elasticities we demonstrate that anticipatory behavior provides an important explanation for this result gasoline buyers increase purchases before tax increases and delay purchases before tax decreases rendering the tax instrument endogenous including suitable leads and lags in the regression restores the validity of the iv estimator resulting in much lower elasticity estimates copyright 2016 john wiley sons ltd

household energy prices and inequality evidence from german microdata based on the easi demand system abstract this paper studies the distributional effects of rising energy costs for households in contrast to most of the previous literature our specification differentiates between electricity and heating demand and still models other consumption goods in realistic detail we use a yet unexplored data set on household expenditures in germany and extend the recently developed easi demand system for the analysis of inequality and welfare at the individual and social level the easi system reveals non linearity of engel curves which when neglected can lead to biased estimates of distributional effects we find that increases in heating prices are more regressive than those in electricity furthermore current proposals for social tariffs are found to be less effective than targeted compensation schemes

distributional and efficiency impacts of increased us gasoline taxes we examine the impacts of increased us gasoline taxes in a model that links the markets for new used and scrapped vehicles and recognizes the consider able heterogeneity among households and cars household choice parameters derive from an estimation procedure that integrates individual choices for car ownership and miles traveled we find that each cent per gallon increase in the price of gasoline reduces the equilibrium gasoline consumption by about 0 2

the renewable fuel standard in competitive equilibrium market and welfare effects we construct a tractable multi market equilibrium model designed to evaluate alternative biofuel policies the model integrates the u s agricultural sector with the energy sector and it explicitly considers both u s ethanol and biodiesel production the model provides a structural representation of the renewable fuel standard rfs policies and it uses the arbitrage conditions defining the core value of renewable identification number prices to identify the relevant competitive equilibrium conditions the model is parameterized based on elasticities and technical coefficients from the literature to represent observed 2015 data the model is simulated to analyze alternative scenarios including repeal of the rfs projected 2022 rfs mandates and optimal second best mandates the results confirm that the current rfs program considerably benefits the agriculture sector but also leads to overall welfare gains for the united states mostly via beneficial terms of trade effects implementation of projected 2022 mandates which would require further expansion of biodiesel production would lead to a considerable welfare loss relative to 2015 mandate levels constrained second best optimal mandates would entail more corn based ethanol and less biodiesel than currently mandated

how robust is the uniform emissions pricing rule to social equity concerns abstract this paper examines pollution tax differentiation across industries in light of social equity concerns using theoretical and numerical general equilibrium analyses in an optimal tax framework we characterize the drivers for non uniform optimal taxes stemming from the interaction of household heterogeneity with social preferences quantitatively assessing the case of price based co2 emissions control in the u s economy we find that uniform emissions pricing is approximately optimal when social concerns are defined over inequity induced by the environmental tax the deviation from uniform emissions pricing however becomes non negligible when pollution tax rebates deviate much from optimal transfer schemes or when social concerns are defined over both policy induced impacts and inequity unrelated to environmental policy our results are robust to a number of model extensions including the stringency of the environmental target downstream vs upstream taxation pre existing distortionary taxes and parametric uncertainty in firms and households equilibrium tax responses

annual fees and recreation choice models of recreation behavior have typically ignored the role of fixed annual fees such as the fee for a recreational license in determining choice and welfare we demonstrate how techniques from the literature on discrete continuous choice and two part tariffs can address a situation where fixed annual fees are essential to determining the choice of a recreation site we explore how accounting for value captured by fixed fees can influence the way resource changes are assessed

identifying supply and demand elasticities of agricultural commodities implications for the us ethanol mandate we present a new framework to identify supply elasticities of storable commodities where past shocks are used as exogenous price shifters in the agricultural context past yield shocks change inventory levels and futures prices of agricultural commodities we use our estimated elasticities to evaluate the impact of the 2009 renewable fuel standard on commodity prices quantities and food consumers surplus for the four basic staples corn rice soybeans and wheat prices increase 20 per cent if one third of commodities used to produce ethanol are recycled as feedstock with a positively skewed 95 percent confidence interval that ranges from 14 to 35 per cent jel q11 q16 q42 q48

when tax incentives drive illicit behavior the manipulation of fuel economy in the automobile industry abstract this study examines and identifies the underlying incentives for falsifying fuel economy on the part of the automobile industry using novel microdata on on road fuel consumption in japan we find a discontinuous increase in the fuel economy gap the disparity between official test results and real world fuel economy of 6 percent at the tax incentive eligibility thresholds further evidence suggests that much of the observed gap remains unexplained by driver or vehicle characteristics and that no gap is observed at similar levels of fuel economy when they are not tied to the large tax incentive eligibility our findings suggest that feebates large incentive schemes based on fuel economy levels may in turn incentivize automakers to cook the books on fuel economy figures

automakers short run responses to changing gasoline prices abstract we provide empirical evidence that automobile manufacturers use cash incentives to offset how gasoline price fluctuations affect the expected fuel expenses of automobile buyers regressions based on a database of incentives over 2003 to 2006 suggest that on average manufacturers offset 40 of the change in relative fuel costs between vehicles due to gasoline price fluctuations the results highlight that carbon taxes and emissions trading programs likely would generate substantial substitution within vehicle classes and studies that ignore manufacturer discounting likely underestimate consumer demand for fuel economy the results also have implications for the optimal design of feebate programs

pounds that kill the external costs of vehicle weight heavier vehicles are safer for their own occupants but more hazardous for other vehicles simple theory thus suggests that an unregulated vehicle fleet is inefficiently heavy using three separate identification strategies we show that controlling for own vehicle weight being hit by a vehicle that is 1000 pounds heavier generates a 40 50 increase in fatality risk these results imply a total accident related externality that exceeds the estimated social cost of us carbon emissions and is equivalent to a gas tax of 0 97 per gallon 136 billion annually we consider two policies for internalizing this external cost a weight varying mileage tax and a gas tax and find that they are similar for most vehicles the findings suggest that european gas taxes may be much closer to optimal levels than the us gas tax language en

electric vehicles rising from the dead data needs for forecasting consumer response toward sustainable energy sources in personal transportation abstract since standard vehicles are powered by internal combustion mechanisms that rely on fossil fuels electric vehicles that are propelled by one or more electric engines have been proposed as an alternative to promote sustainable personal transportation in this paper we propose a general demand model for vehicle purchases at the individual level assuming that the necessary microdata is available we then list the ideal microdata that would be needed for estimating this general demand model for elaborating this list we take into account the particularities of low emission vehicles with emphasis in their cost reliability environmental benefits tradeoff as well as the potentiality for evaluation of welfare improving policies related to adoption of energy efficient technologies we discuss data sources and collection strategies for the different attributes of the model especially for those characteristics that are nonstandard such as symbolic values for instance we discuss the role of range anxiety as a barrier of adoption of electric vehicles and the implied relevance of including driving range to get consumers willingness to pay for better performing electric batteries

gasoline prices fuel economy and the energy paradox abstract policymakers often assert that consumers undervalue future gasoline costs when they buy automobiles we test this by measuring whether relative prices of vehicles with different fuel economy ratings fully adjust to variation in gasoline prices vehicle prices move as if consumers are indifferent between 1 00 in discounted future gas cost and 0 76 in vehicle purchase price we show how corrections for endogenous market shares and utilization measurement error and different gasoline price forecasts affect the results we also provide unique evidence of sticky information vehicle markets respond to changes in gasoline prices with up to a six month delay

the impact of emissions based taxes on the retirement of used and inefficient vehicles the case of switzerland abstract previous evaluations of emissions based car taxes have estimated their impact on the shares or sales of new vehicles in contrast we ask whether taxes that penalize high emitters induce changes in the retirement of existing and inefficient vehicles we exploit natural experiment conditions in switzerland to analyze the impact of three different bonus malus annual registration fee schemes implemented at the cantonal level in the three schemes the bonus rewards new fuel efficient vehicles the malus is retroactive in canton obwalden i e it is charged on both new and existing high emitting cars but prospective in geneva and ticino we use a difference in difference design within a survival analysis framework to assess direct treatment effects and spillover effects while the bonus malus in obwalden hastens the retirement of existing high emitting vehicles by around 5 the scheme in geneva postpones retirement by some 3 we find no statistically significant effects in ticino these findings have important implications about the desirability of bonus malus schemes and on their design as well as on old car scrappage programs

energy subsidies and policy commitment in political equilibrium abstract because non renewable energy subsidies affect incentives for investing in energy saving technologies they entail a classic investment hold up problem once investment has taken place policymakers will tend to overuse them for distributional reasons which will in turn depress investment by forward looking agents reforming energy subsidies thus requires overcoming a policy commitment problem in this paper we show that even when commitment is feasible it may fail to materialize in a political equilibrium due to politicians re election incentives in particular it will be those politicians who are comparatively less favorable to energy subsidies who may fail to commit to phase them out

estimates from a consumer demand system implications for the incidence of environmental taxes abstract most studies suggest that environmental taxes are regressive making them less attractive policy options we consider the distributional effects of a gasoline tax increase using four incidence measures and under three scenarios for gas tax revenue use to incorporate behavioral responses we use consumer expenditure survey data to estimate a consumer demand system that includes gasoline other goods and leisure our estimates confirm that when revenues are not recycled a gasoline tax is regressive use of incidence measures that ignore demand responses however will substantially overstate this regressivity in contrast the differences between the equivalent variation and easier to implement consumer surplus measures are relatively small in addition our results suggest that using the additional gas tax revenue to fund labor tax cuts makes the policy substantially less regressive while using the revenue to fund lump sum transfers actually makes it progressive

does britain or the united states have the right gasoline tax this paper develops an analytical framework to assess the second best optimal level of gasoline taxation taking into account unpriced pollution congestion and accident externalities as well as interactions with the broader fiscal system we provide calculations of the optimal taxes for the us and the uk under a variety of parameter scenarios under our central parameter values the second best optimal gasoline tax is 1 01 gal for the us and 1 34 gal for the uk current tax rates are much lower than this in the us and higher in the uk the calculations are moderately sensitive to alternative parameter assumptions the congestion externality is the largest component in both nations revenue raising needs also play a significant role as do accident externalities and local air pollution potential welfare gains from reducing the current uk tax rate are estimated at nearly one fourth the production cost of all gasoline used in the uk even larger gains could be achieved by switching to a tax on vehicle miles with equal revenue yield for the us the welfare gains from optimizing the gasoline tax are smaller but those from switching to an optimal tax on vehicle miles are very large

environmental policy and vehicle safety the impact of gasoline taxes i introduction public policy to address the environmental externalities associated with automobile use will likely lead to substantial changes in the composition of the u s passenger vehicle fleet while many economists suggest pigovian taxation as the best approach to this problem anderson et al 2011 the main policy instrument in the united states has been the corporate average fuel economy cafe standards which have recently been dramatically increased environmental protection agency and department of transportation 2012 while most of the improvement in fuel economy will necessarily come from technological improvements an inexpensive way to improve fuel economy is simply to lower vehicle weights indeed the text of the new regulations states that we expect manufacturers to reduce vehicle mass as a compliance strategy p 62741 the reduction in vehicle weight that occurred in response to the oil price shocks of the 1970s and the initial cafe standards was estimated by crandall and graham 1989 to substantially increase automobile accident fatalities the passenger vehicle fleet has changed greatly since 1989 with one of the most notable features being the increase in the prevalence of light trucks a category that includes minivans pickup trucks and sport utility vehicles suvs several authors have suggested that the external impacts on the safety of occupants of other vehicles may exceed the protective benefit afforded to light truck owners so that the now heavier vehicle fleet might actually be detrimental to overall safety see especially gayer 2004 white 2004 and anderson 2008 the negative safety and environmental externalities associated with vehicle weight could potentially be addressed simultaneously via pigovian taxation further strengthening the argument for taxation over fuel economy standards an important problem that must be addressed in interpreting automobile accident data is to disentangle vehicle fatality rates into a vehicle safety component treatment effect and a driver safety component selection effect this paper presents a novel model that allows simultaneous estimation of the relationship of vehicle weight with the safety of the own vehicle occupants internal impacts and that of other vehicle occupants external impacts conditional upon an accident occurring these estimates can then be used to estimate the relative riskiness of drivers of different types of vehicles the model is estimated using maximum likelihood techniques and data from the fatality analysis reporting system fars which includes data on every fatal accident that occurs in the united states but excludes all non fatal accidents the main empirical finding of the paper is that the protective effects of weight on own occupants are diminishing while the destructive external effects on other vehicle occupants are increasing for marginal vehicle weight changes above approximately 3 800 pounds the external costs outweigh the internal benefits in two vehicle crashes while the protective effect of vehicle weight in single vehicle crashes partly compensates for this a substantial fraction of the vehicle fleet is above the weight where net safety costs exceed benefits the safety externalities associated with these heaviest vehicles substantially exceed the environmental externalities associated with carbon emissions the nature of the model lends itself to simulating the potential impact of relatively arbitrary changes to the vehicle fleet composition simulations of hypothetical changes in the vehicle weight distribution establish that reducing vehicle weight can either increase or decrease automobile accident fatalities depending upon whether the reductions are concentrated at the lower or higher end of the current weight distribution recent empirical changes to the weight distribution of cars sold in the united states are incorporated into the simulation model which predicts little impact on accident fatalities

the substantial bias from ignoring general equilibrium effects in estimating excess burden and a practical solution we show that under typical conditions the simple excess burden triangle formula substantially underestimates the excess burden of commodity taxes in some cases by a factor of 10 or more this formula performs poorly because it ignores general equilibrium interactions most important interactions between the taxed commodity and the labor market many prior studies have shown that general equilibrium interactions affect excess burden but have not appreciated the bias associated with ignoring these interactions or the quantitative importance of this bias we derive an implementable alternative to the simple formula this alternative formula captures interactions that the simple formula omits as a result it is both unbiased and usually more accurate

the allocative cost of price ceilings in the u s residential market for natural gas a direct consequence of restricting the price of a good for which secondary markets do not exist is that in the presence of excess demand the good will not be allocated to the buyers who value it the most we demonstrate the empirical importance of this allocative cost for the u s residential market for natural gas which was subject to price ceilings during 1954 89 using a household level discrete continuous model of natural gas demand we estimate that the allocative cost in this market averaged 3 6 billion annually nearly tripling previous estimates of the net welfare loss to u s consumers

simpler is better predicting consumer vehicle purchases in the short run abstract when agencies such as the us environmental protection agency epa establish future greenhouse gas emissions standards for new vehicles forecasting future vehicle purchases due to changes in fuel economy and prices provides insight into regulatory impacts we compare predictions from a nested logit model independently developed for us epa to a simple model where past market share predicts future market share using data from model years 2008 2010 and 2016 the simple model outperforms the nested logit model for all goodness of prediction measures for both prediction years including changes in vehicle price and fuel economy increases bias in forecasted market shares this bias suggests price increases are correlated with unobserved increases in vehicle quality changes in preferences or brand specific changes in market size but not cost pass through for 2010 past shares predict better than a nested logit model despite a major shock the economic disruption caused by the great recession observed share changes during this turbulent period may offer upper bounds for policy changes in other contexts the largest observed change in market share across the two horizons is 6 6 for manufacturers in 2016 and 3 4 for an individual vehicle in 2010

to rebate or not to rebate fuel economy standards versus feebates we compare the welfare effects in equilibrium of two environmental regulations that aim at increasing the new cars fleet s average fuel efficiency the fuel economy standards and the feebate policies maintaining the same environmental benefit and tax revenue we simulate the implementation of each policy in france and the united states standard type policies have larger negative welfare effects up to 3 2 times those from the feebate effects on manufacturers are heterogeneous some are better of under the standard regulation the addition of a market to trade levels of fuel efficiency dominates the simple standard regulation but not always the feebate we also consider the attribute based standard technological improvements and the equivalence with fuel taxes as extensions

nonparametric estimation of a nonseparable demand function under the slutsky inequality restriction we present a method for consistent nonparametric estimation of a demand function with nonseparable unobserved taste heterogeneity subject to the shape restriction implied by the slutsky inequality we use the method to estimate gasoline demand in the united states the results reveal differences in behavior between heavy and moderate gasoline users they also reveal variation in the responsiveness of demand to plausible changes in prices across the income distribution we extend our estimation method to permit endogeneity of prices the empirical results illustrate the improvements in finite sample performance of a nonparametric estimator from imposing shape restrictions based on economic theory

the cost of reducing gasoline consumption high nominal gas prices new awareness of threats to national security and growing concern about global warming have reignited discussion of ways to reduce gasoline consumption in the united states debate centers on changing two policies already in place the federal gas tax and corporate average fuel economy cafe standards two influential recent reports find that increasing the gas tax would attain a given reduction in gas consumption at lower cost than would tightening cafe standards national research council 2002 congressional budget office 2003 the gas tax has this advantage because it encourages not just increases in fuel efficiency but also reductions in miles driven in contrast cafe standards actually encourage more driving because increases in fuel efficiency reduce the cost of gas per mile driven we also compare the costs of the gas tax and cafe standard but take into account interactions with preexisting tax distortions many papers examine the effects of these tax interactions in other contexts but to our knowledge none of them considers the cafe standard see e g lars bovenberg and ruud de mooij 1994 ian parry 1995 lawrence goulder 1995 bovenberg and goulder 1996 parry et al 1999 don fullerton and gilbert metcalf 2001 these interactions reduce the cost of the gas tax but increase the cost of cafe thus expanding the cost advantage enjoyed by the gas tax this difference does not arise because the gas tax raises revenue while the cafe standard does not rather this result is similar to that in west and williams 2004a which showed that since gasoline and leisure are relative complements raising the gas tax will increase labor supply generating additional efficiency gains in this paper we estimate a consumer demand system using data from the consumer expenditure survey and the california air resources board and find that miles driven and leisure are relative complements thus the gas tax encourages labor supply by raising the cost per mile driven producing an additional efficiency gain conversely because cafe reduces the cost per mile it discourages labor supply and yields an additional efficiency loss while the induced changes in labor supply are tiny relative to the labor market they are still substantial relative to the gas market and thus have a dramatic effect on the relative costs of the two policies our point estimates imply that they reduce the social marginal cost of the gas tax starting from the status quo gas tax rate and ignoring the benefits of reduced gas consumption by almost 30 percent while increasing the marginal cost of cafe by nearly 60 percent this result implies that the case for raising the gas tax rather than tightening the cafe standard is far stronger than previous studies suggest indeed it strongly suggests that any tightening at all of the cafe standard would lower welfare unless the benefits of reduced gas consumption have been seriously underestimated

bicycle infrastructure and traffic congestion evidence from dc s capital bikeshare abstract this study explores the impact of bicycle sharing infrastructure on urban transportation we estimate a causal effect of the capital bikeshare on traffic congestion in the metropolitan washington d c area we exploit a unique traffic dataset that is finely defined on a spatial and temporal scale our approach examines within city commuting decisions as opposed to traffic patterns on major thruways empirical results suggest that the availability of a bikeshare reduces traffic congestion upwards of 4 within a neighborhood in addition we estimate heterogeneous treatment effects using panel quantile regression results indicate that the congestion reducing impact of bikeshares is concentrated in highly congested areas

exvessel price determination in the alaska king crab fishery a formula price contract under uncertainty abstract commercial fisheries industry structure often suggests exvessel price formation occurs in the context of a competitive harvesting sector and an oligopsonistic processing sector however industry conduct leading to a determination of exvessel price can be notably at odds with this inference this paper presents empirical evidence that the conduct of at least one such fishery the alaska king crab industry may emulate bilateral monopoly exvessel price determination is consistent with an implicit formula price contract in which fishers behave as monopolists through bargaining associations while processors behave as countervailing monopsonists even in the absence of explicit collusion both sectors appear to behave in a manner consistent with joint expected profit maximization with profit shares apportioned via the implicit formula price contract this price formation process simplifies empirical analysis of the bilateral monopoly conduct by avoiding complicated game theoretic bargaining models

fuel economy car class mix and safety fuel economy standards change the composition of the vehicle fleet potentially influencing accident fatality risks i estimate the direction and magnitude of this impact introducing a correction for selection on driver behavior a policy application using my new estimates shows that the present distinction between light trucks and cars in fuel economy rules has very negative consequences for overall safety each mpg increment to the standard results in an additional 150 fatalities per year in expectation my correction for selection is pivotal in this finding i then demonstrate a simple alternative regulation that can produce near zero changes in accident fatalities

estimating multiple discrete choice models an application to computerization returns buyers in many markets face multiple discrete choices they can purchase multiple units as well as multiple brands at the same time this paper presents a multiple discrete choice model for the analysis of differentiated products demand users maximize profits by choosing the number of units of each brand they purchase i estimate the model using micro level data on the demand for personal computers i use the estimated demand structure to assess the welfare gains from computerization and technological innovation in peripherals the estimated return on investment in personal computers is 92 moreover a 10 increase in the performance to price ratio of microprocessors leads to a 2 2 gain in the estimated user surplus the personal computer pc market is of interest to industrial organization economists because of its size the continual technological change and above all because of the farreaching implications of pcs on the economy as a whole several distinct features make pc demand difficult to model pcs are a differentiated durable good in constant technological evolution moreover buyers make multiple discrete choices firms according to our data spread their purchases of pcs over different brands at the same time they buy pcs in blocks several units of each brand that they have chosen the aim of the paper is to present a model that captures these features and to use this model to estimate the welfare gains from computerization classical discrete choice models allow one choice among mutually exclusive alternatives in contrast the proposed framework allows users to demand multiple units and multiple brands the model can be applied to other cases of multiple discrete choices e g the composition of airline fleets car holdings per household the fields of the faculty in economics departments household cereals consumption or any other good consumed in more than one variety during a relevant time period although pervasive multiple discrete choice problems have received little attention because of their complexity a central issue regarding the pc market is the current controversy in the economics literature about the computerization puzzle this puzzle stems from the empirical finding that computerization has had no effect on firm productivity griliches and siegel 1991 and morrison and berndt 1990 contrary to those results hendel 1994 and lichtenberg 1995 using more disaggregate data than most previous studies report excess returns to computerization this indicates that data aggregation may have created the computerization puzzle in this paper i present a model consistent with the basic

the effects of the corporate average fuel efficiency standards in the us this paper examines the effects of the corporate average fuel economy standards cafe on automobile sales prices and fuel consumption first a discrete choice model of automobile demand and a continuous model of vehicle utilization are estimated using micro data from the consumer expenditure survey for 1984 1990 next the demand side model is combined with a model of oligopoly and product differentiation on the supply side with these elements in place the effects of the cafe regulation are assessed through simulations and compared to the effects of alternative policy instruments such as an increase in gasoline tax

the distributional impacts of u s energy policy abstract this paper surveys energy policy in the united states from a distributional perspective focusing on the distributional impacts of energy taxes is too narrow a framework the united states relies much more heavily on regulation than taxation to address energy related market failures it argues that most regulatory policies and tax subsidies to achieve energy policy goals are regressive this includes fuel economy standards ev purchase incentives and energy efficiency tax incentives in contrast a carbon tax is likely to be progressive even when ignoring the use of revenue the view that carbon taxes are regressive stems from an incomplete distributional analysis that assumes all impacts arise from increases in the costs of consumer goods and services recent analyses have emphasized the importance of impacts on sources of income in particular a carbon tax is likely to reduce returns to capital more than wages with capital disproportionately held by higher income households this differential factor income effect is progressive in addition transfer income more important for lower income households tends to be indexed and so contributes to a carbon tax s progressivity how carbon tax revenue is used can add even greater progressivity to a carbon tax reform

new car sales and used car stocks a model of the automobile market this article develops a short run general equilibrium model of the automobile market by combining a discrete choice model of consumer automobile demand with simple models of new automobile production and used vehicle scrappage the theoretical model allows an unlimited degree of heterogeneity of both consumers and automobiles with equilibrium defined as aggregate demand equal to supply for every vehicle type econometric estimates of the scrappage and demand functions are then used to create a simulation model of the automobile market which is used to provide forecasts of automobile sales stocks and scrappage for the 1978 1990 period

household gasoline demand in the united states supported by the mit center for energy and environmental policy research the u s dept of energy and the national science foundation

carpooling and driver responses to fuel price changes evidence from traffic flows in los angeles abstract we examine carpooling and driver responses to fuel price changes using a simple theoretical model we show that traffic flows in mainline lanes unambiguously decrease when fuel prices increase and this effect is stronger when the presence of a carpool lane provides a substitute to driving alone in contrast in carpool hov lanes flow can either increase or decrease these predictions are tested using 8 years of traffic flow data for 1700 locations in los angeles in our preferred specification the mean elasticity of flow with respect to fuel price is 0 136 for hov lanes for a 10 increase in fuel price this implies 10 additional carpools per hour 8 8 million per year in additional congestion costs for carpoolers and 11 3 million lower costs for mainline drivers for mainline lanes flow elasticities are 0 083 and 0 050 for highways with and without an hov lane these estimates imply that the mean highway with an hov lane experiences a 30 larger decrease in hourly flow compared to the mean highway without an hov lane flows in hov lanes show an immediate decrease following a price increase but respond positively to price increases over time which suggests time is an important input to carpool formation

the long run impact of biofuels on food prices more than 40 of us corn is now used to produce biofuels which are used as substitutes for gasoline in transportation biofuels have been blamed universally for past increases in world food prices and many studies have shown that these energy mandates in the us and eu may have a large 30 60 impact on food prices in this paper we use a partial equilibrium framework to show that demand side effects in the form of population growth and income driven preferences for meat and dairy products rather than cereals may play as much of a role in raising food prices as biofuel policy by specifying a ricardian model with differential land quality we find that a significant amount of new land will be converted to farming which is likely to cause a modest increase in food prices however biofuels may increase aggregate world carbon emissions due to leakage from lower oil prices and conversion of pasture and forest land for farming

market equilibrium and the environmental effects of tax adjustments in china s automobile industry this paper explores the effects of consumption tax and fuel tax adjustments in the chinese automobile industry applying the model and simulation method of berry levinson and pakes 1995 we conduct a comparative static analysis of equilibrium prices and sales fuel consumption and social welfare before and after tax adjustments for the first time we compare the progressivity of both taxes our empirical findings suggest that the fuel tax is effective in decreasing fuel consumption at the expense of social welfare while the consumption tax does not significantly affect either fuel consumption or social welfare

lifetime incidence and the distributional burden of excise taxes this implies that low income households in one year have some chance of being higher income households in other years and significantly affects the estimated distributional burden of excise taxes this paper shows that household expenditures on gasoline alcohol and tobacco as a share of total consumption a proxy for lifetime income are much more equally distributed than expenditures as a share of annual income from a longer horizon perspective excise taxes on these goods are therefore much less regressive than standard analyses suggest this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item this abstract was borrowed from another version of this item

fuel consumption and gasoline prices the role of assortative matching between households and automobiles abstract analyses of policies to reduce gasoline consumption have focused on two effects a compositional effect on the fuel economy of the automotive fleet and a utilization effect on how much people drive however the literature has missed a third effect a matching effect in which policies change how high utilization households are matched to fuel efficient vehicles in equilibrium we show that higher gas prices should lead to stronger assortative matching empirical estimates using us micro level data are consistent with this hypothesis we find a 0 50 increase in the gas tax would reduce us gas consumption by 0 8 through the matching effect alone bringing annual environmental benefits of about 1 7 billion

lose some save some obesity automobile demand and gasoline consumption abstract this paper examines the unexplored link between the prevalence of overweight and obesity and vehicle demand in the united states exploring annual sales data of new passenger vehicles at the model level in 48 u s counties from 1999 to 2005 we find that new vehicles demanded by consumers are less fuel efficient on average as a larger share of people become overweight or obese the ols results show that a 10 percentage point increase in obesity and overweight reduces the average mpg of new vehicles demanded by 1 4 percent an effect requiring a 12 cent increase in gasoline prices to counteract the 2sls results after controlling for possible endogeneity in overweight and obesity prevalence put those two numbers at 5 percent and 54 cent respectively these findings robust to a variety of specifications suggest that policies to reduce overweight and obesity can have additional benefits for energy security and the environment

the effect of gasoline consumption tax on consumption and carbon emissions during a period of low oil prices abstract since june 2014 international crude oil prices have fallen sharply because of the new refined oil pricing mechanism china s domestic refined oil prices fell with the international oil prices during the period from november 28 2014 to january 12 2015 the china s domestic refined oil consumption tax had been increased for three times then the lowest price of refined oil was set to protect refined oil prices from further declining through financial means used to control the prices of refined oil can the goals of oil consumption reduction and harmful emissions mitigation be realised is it reasonable to use such a way adjusting refined oil consumption tax in this paper we construct an econometric model investigate the elasticity of china s gasoline demand and then make a further research on the effect of carbon dioxide co2 emission reduction we also study the rationality of the way adjusting the consumption tax we propose some policy suggestions based on the research in the context of the frequent fluctuations in international oil prices and the rising dependence on international crude oil in china according to our study compared with the developed countries e g the united states china s gasoline demand elasticity is not high however a certain extent tax adjustment can still guide consumers towards saving energy so as to achieve the purpose of controlling gasoline consumption and reducing co2 emissions the frequent tax adjustment reveals the irrationality of the refined oil pricing mechanism and the taxes policy china has entered the 13th five development term more reform measures should be proposed to build the crude oil market and improve the taxes policy

the market impact and the cost of environmental policy evidence from the swedish green car rebate we quantify the effects of the swedish gcr a program to reduce oil dependence and greenhouse gas emissions in the automobile industry we find the gcr to increase the market shares of green cars and its cost to be 109 tonco2 saved thus 5 times the price of an emission permit since the main green cars in sweden are ffvs flexible fuel vehicles which can switch between petrol gasoline and ethanol we also account for fuel choice which increases the cost of the program finally we show that consumers would have purchased ffvs regardless of the rebate provided by the gcr

nonparametric estimation of exact consumers surplus and deadweight loss we apply nonparametric regression models to estimation of demand curves of the type most often used in applied research from the demand curve estimators we derive estimates of exact consumers surplus and deadweight loss which are the most widely used welfare and economic efficiency measures in areas of economics such as public finance we also develop tests of the symmetry and downward sloping properties of compensated demand we work out asymptotic normal sampling theory for kernel and series nonparametric estimators as well as for the parametric case the paper includes an application to gasoline demand empirical questions of interest here are the shape of the demand curve and the average magnitude of welfare loss from a tax on gasoline in this application we compare parametric and nonparametric estimates of the demand curve calculate exact and approximate measures of consumers surplus and deadweight loss and give standard error estimates we also analyze the sensitivity of the welfare measures to components of nonparametric regression estimators such as the number of terms in a series approximation

from gallons to miles a disaggregate analysis of automobile travel and externality taxes abstract policymakers have prioritized increasing highway revenues as rising fuel economy and a fixed federal gasoline tax have led to highway funding deficits we use a novel disaggregate sample of motorists to estimate the effect of the price of a vehicle mile traveled on vmt and we provide the first national assessment of vmt and gasoline taxes that are designed to raise a given amount of revenue we find that a vmt tax dominates a gasoline tax on efficiency distributional and political grounds when policymakers enact independent fuel economy policies and when the vmt tax is differentiated with externalities imposed per mile

product differentiation and oligopoly in international markets the case of the u s automobile industry this paper develops and estimates a model of the u s automobile industry on the demand side a discrete choice model is adopted that is estimated using micro data from the consumer expenditure survey the estimation results are used in conjunction with population weights to derive aggregate demand on the supply side the automobile industry is modelled as an oligopoly with product differentiation equilibrium is characterized by the first order conditions of the profit maximizing firms the estimation results are used in counterfactual simulations to investigate two trade policy issues the effects of the ver and exchange rate pass through

the impacts of energy efficiency policies meta analysis abstract this paper attempts to quantitatively summarize the existing empirical evidence on the effects of energy efficiency policies on energy demand and on the price of associated durable goods as well as to identify the main factors that systematically affect the estimated impacts to this end a meta regression analysis of the effects of energy efficiency policies is carried out on the basis of an extensive review of the existing literature selecting those studies that analyze the impact of energy efficiency policies with respect to a business as usual setting taking into account the econometric problems associated with this type of analysis intra class correlation cross sectional dependence publication bias in pursuit of robust outcomes the results show that the studies analyzing the effects of energy efficiency policies estimate a significant impact of these policies on energy demand 10 5 8 8 and the price of related durable goods 7 9 6 the main factors that influence results are the policy instrument the targeted sector the type of country the analyzed period the consideration of free riders and the type of analysis data and publication energy demand and the sector and analyzed period price of durables

socio technical inertia understanding the barriers to electric vehicles it is widely accepted that electrification of the transport sector is one of several technological trajectories that could redress some of the environmental issues associated with the growth in travel demand including climate change and oil demand at a global scale and air quality and noise pollution at the urban scale electric vehicles have been considered a promising technology at repeated intervals over the last century but this promise has not been realised this paper is a contribution to understanding the key tools and strategies that might enable the successful introduction of new technologies and innovations by exploring the key barriers to electric vehicles encountered in two countries uk and germany where the automobile industry has been historically significant the study evaluates stakeholders opinions on relevant regulation infrastructure investment r d incentives and consumer incentives the key findings of the research are that the introduction and penetration of evs is confronted by several barriers that inhibit a larger market penetration under current conditions which in turn casts doubt on the assumptions of strategic niche management and transitions theory

distributional effects of alternative vehicle pollution control policies abstract previous work shows that policies that subsidize new vehicles and tax size miles or gasoline efficiently reduce pollution less is known about their distributional effects this paper examines distributional effects by estimating the joint demand for vehicles and miles using the consumer expenditure survey greater price responsiveness among low income households enhances progressivity of gas or miles taxes across lower incomes and mitigates regressivity across upper incomes taxes on engine size or subsidies to new vehicles are significantly more regressive than gas or miles taxes

multiple discreteness and product differentiation demand for carbonated soft drinks for several of the largest supermarket product categories such as carbonated soft drinks canned soups ready to eat cereals and cookies consumers regularly purchase assortments of products within the category consumers often purchase multiple products and multiple units of each alternative selected on a given trip this multiple discreteness violates the single unit purchase assumption of multinomial logit and probit models the misspecification of such demand models in categories exhibiting multiple discreteness would produce incorrect measures of consumer response to marketing mix variables in studying product strategy these models would lead to misleading managerial conclusions we use an alternative microeconomic model of demand for categories that exhibit the multiple discreteness problem recognizing the separation between the time of purchase and the time of consumption we model consumers purchasing bundles of goods in anticipation of a stream of consumption occasions before the next trip we apply the model to a panel of household purchases for carbonated soft drinks