Stick or Carrot? Asymmetric Responses to Vehicle Registration Taxes in Norway

Alice Ciccone () and Emilia Soldani
Additional contact information
Alice Ciccone: Institute of Transport Economics (TØI)

Environmental & Resource Economics, 2021, vol. 80, issue 1, No 3, 59-94

Abstract: Abstract Vehicle registrations have been shown to strongly react to tax reforms aimed at reducing CO2 emissions from passengers’ cars, but are the effects equally strong for positive and negative tax changes? The literature on asymmetric reactions to price and tax changes has documented asymmetries for everyday goods but has not yet considered durables. We leverage multiple vehicle registration tax (VRT) reforms in Norway and estimate their impact on within car-model substitutions. We estimate stronger effects for cars receiving tax cuts and rebates than for those affected by tax increases. The corresponding estimated elasticity is − 1.99 for VRT decreases and 0.77 for increases. As consumers may also substitute across car models, our estimates represent a lower bound.

Keywords: CO2 emissions intensity; New vehicles; Vehicle registration tax; Elasticity; Asymmetric response; Norway (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10640-021-00578-6 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:enreec:v:80:y:2021:i:1:d:10.1007_s10640-021-00578-6

Ordering information: This journal article can be ordered from
http://www.springer. ... al/journal/10640/PS2

DOI: 10.1007/s10640-021-00578-6

Access Statistics for this article

Environmental & Resource Economics is currently edited by Ian J. Bateman

More articles in Environmental & Resource Economics from Springer, European Association of Environmental and Resource Economists Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().