Effects of Tax Incentives on Sales of Eco-Friendly Vehicles: Evidence from Japan

Ibrahim Alhulail () and Kenji Takeuchi
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Ibrahim Alhulail: Graduate School of Economics, Kobe University

No 1412, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: This study examines the effects of economic incentives on the sales of ecofriendly vehicles in Japan. We focus on the Tonnage and Acquisition Tax Cuts for Eco-Friendly Vehicles and the two waves of Eco-Car Subsidies implemented in Japan. We use the monthly sales data of 10 vehicles from April 2006 to March 2013. We find that the effects of the tax incentives were more significant than the effect of gasoline price. This is in contrast to results from the United States and Canada, where gasoline prices have had a larger effect on increasing the adoption levels of hybrid electric vehicles. The difference is due to the structure of the tax cut. Japan fs policy of taxes paid upon purchase was more effective compared to the policies in the United States and Canada, where certain tax cuts were on income taxes.

Keywords: Eco-Friendly Vehicle; Hybrid Electric Vehicle; Tax Cuts; Subsidy; Gasoline Prices (search for similar items in EconPapers)
JEL-codes: L62 Q55 Q58 (search for similar items in EconPapers)
Pages: 21pages
Date: 2014-03
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-pbe and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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