Authors: Frondel, Manuel
Vance, Colin
Title: For efficiency, tax energy
Language (ISO): en
Abstract: Using household travel diary data collected in Germany between 1997 and 2012, we employ an instrumental variable (IV) approach to estimate fuel price and efficiency elasticities. The aim is to gauge the relative impacts of fuel economy standards and fuel taxes on distance traveled. We find that the magnitude of the elasticity estimates are statistically indistinguishable: higher fuel prices reduce driving by the same degree as higher fuel efficiency increases driving. This finding indicates an offsetting effect of fuel efficiency standards on the effectiveness of fuel taxation, calling into question the efficacy of the European Commission’s current efforts to legislate CO2 emissions limits for new cars given prevailing high fuel taxes.
Subject Headings: automobile travel
instrumental variable approach
rebound effect
URI: http://hdl.handle.net/2003/31143
http://dx.doi.org/10.17877/DE290R-5623
Issue Date: 2013-10-25
Appears in Collections:Sonderforschungsbereich (SFB) 823

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