Quantifying the benefits of the introduction of the hybrid electric vehicle

Richard P. Langford and Kenneth Gillingham

International Journal of Industrial Organization, 2023, vol. 87, issue C

Abstract: This study models demand and supply in the market for new automobiles to estimate the economic benefits generated by the introduction of the hybrid electric vehicle. We estimate our model using all new vehicle registrations in California along with detailed demographic data. Our counterfactual analysis reveals that the addition of hybrids to the consumer choice set generates gains in social surplus that peak at roughly $1.2 billion annually in 2007, but environmental benefits make up 0.2% of the net benefits. We find that 31% of the social surplus in 2008 can be attributed directly to the hybrid vehicles independently from gains in fuel efficiency, with the remaining 69% attributed to the gains in fuel efficiency. We further show that all income groups benefit from the introduction of the hybrids, with the top 50% of the income distribution receiving the most.

Keywords: Automobile markets; New products; Consumer benefits (search for similar items in EconPapers)
JEL-codes: L6 L9 Q4 R4 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:87:y:2023:i:c:s0167718722000790

DOI: 10.1016/j.ijindorg.2022.102904

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