EconPapers    
Economics at your fingertips  
 

Towards a clean vehicle fleet: from households’ valuation of fuel efficiency to policy implications

Bénédicte Meurisse () and Maxime Le Roy

No 2014-16, EconomiX Working Papers from University of Paris Nanterre, EconomiX

Abstract: This paper investigates household behaviour with regard to vehicle fuel efficiency. We propose to approach the Willingness to Pay (WTP) for better fuel efficiency through the Hicksian compensating variation in income. Specifically, we distinguish the Willingness to Pay or to Accept (WTA) buying a more fuel-efficient car from the theoretical WTP for a reduction in fuel consumption without changing one’s car. Then by assuming that the household has to replace its car, we estimate a WTP for the cleanest car. We also analyse what effect a fuel tax and/or a feebate scheme (e.g. a bonus-malus scheme) have on the WTP for the cleanest car and on the driven mileage. We find that the WTP for the cleanest car decreases following the implementation of a fuel tax. To the contrary, a feebate system leads to an increase in this WTP. But we also find that reducing the market price of the new vehicle (i.e. through a bonus) is not worthwhile in the light of the rebound effect. However, a fuel tax – as soon as it exceeds a certain level – is able to nullify the rebound effect.

Keywords: fuel efficiency; willingness to pay; fuel tax; feebate scheme; rebound effect. (search for similar items in EconPapers)
JEL-codes: D11 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-tre
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
http://economix.fr/pdf/dt/2014/WP_EcoX_2014-16.pdf (application/pdf)

Related works:
Working Paper: Towards a clean vehicle fleet: from households’ valuation of fuel efficiency to policy implications (2014) Downloads
Working Paper: Towards a Clean Vehicle Fleet: from Households’ Valuation of Fuel Efficiency to Policy Implications (2014) Downloads
Working Paper: Towards a Clean Vehicle Fleet: from Households’ Valuation of Fuel Efficiency to Policy Implications (2014) Downloads
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:drm:wpaper:2014-16

Access Statistics for this paper

More papers in EconomiX Working Papers from University of Paris Nanterre, EconomiX Contact information at EDIRC.
Bibliographic data for series maintained by Valerie Mignon ().

 
Page updated 2019-12-09
Handle: RePEc:drm:wpaper:2014-16