For efficiency, tax energy
Loading...
Date
2013-10-25
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
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.
Description
Table of contents
Keywords
automobile travel, instrumental variable approach, rebound effect