A Model to Evaluate Vehicle Emission Incentive Policies in Japan

Don Fullerton (), Li Gan () and Miwa Hattori

No 20333, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using three years of data from the 47 prefectures of Japan, we estimate behavior of households who simultaneously make discrete decisions about vehicle ownership and continuous decisions about driving distance. We use the estimated parameters to calculate elasticities and to simulate the effects of alternative pollution control policies such as taxes on gasoline, on distance, or on particular cars. Given choices about cars and distance, we also calculate emissions. Since we model simultaneous choices, both the chosen distance and the chosen car can be affected either by a tax on distance or by a tax on car characteristics. We find expected signs for coefficients on price and income. Car choices are relatively inelastic, however, either to taxes on cars or to taxes on gas or distance. Thus emissions are more affected by taxes on gasoline than by taxes on particular vehicles. Yet taxes on cars have lower costs on consumers and thus lower marginal cost of abatement. Given that the existing gas tax already achieves some abatement, mostly through driving reduction, this analysis suggests that further abatement from the use of distance-reducing taxes is more costly than achieving some marginal abatement from induced changes in car choices. The option with the lowest cost is to tax each car at a rate proportional to its emission rate.

JEL-codes: H23 Q52 (search for similar items in EconPapers)
Date: 2014-07
New Economics Papers: this item is included in nep-ene, nep-reg and nep-tre
Note: EEE PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Don Fullerton & Li Gan & Miwa Hattori, 2015. "A model to evaluate vehicle emission incentive policies in Japan," Environmental Economics and Policy Studies- The Official Journal of the Society for Environmental Economics and Policy Studies / The Official Journal of the East Asian Association of Environmental and, Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(1), pages 79-108, January.

Downloads: (external link)
http://www.nber.org/papers/w20333.pdf (application/pdf)

Related works:
Journal Article: A model to evaluate vehicle emission incentive policies in Japan (2015)
Working Paper: A Model to Evaluate Vehicle Emission Incentive Policies in Japan (2014)
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:nbr:nberwo:20333

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w20333

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().