The Phase-Out of Leaded Gasoline in the EU: A Successful Failure?

Åsa Löfgren and Henrik Hammar

No 19, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: The objective of this paper is to analyze in both descriptive and econometric terms the phase-out of leaded gasoline consumption in the EU countries. The phase-out process is characterized by increased consumption of unleaded gasoline. We analyze the importance of price differences, share of catalytic converters, income per capita, and country characteristics in the phase-out process. Since the expected maintenance costs of using unleaded gasoline in cars without catalytic converters compared to the use of leaded gasoline differ insignificantly according to available evidence, and consumers still use leaded gasoline even though unleaded gasoline is cheaper; we interpret this as a lack of reliable information. The results indicate that countries, which have not yet phased out leaded gasoline, should do this by either banning leaded gasoline or by increasing the tax differential between leaded and unleaded gasoline depending on the objective of the social planner.

Keywords: Leaded gasoline; unleaded gasoline; policy instruments; tax differential (search for similar items in EconPapers)
JEL-codes: D12 D80 Q41 Q48 (search for similar items in EconPapers)
Pages: 21 pages
Date: 1999-12-07
New Economics Papers: this item is included in nep-eec and nep-his
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Citations: View citations in EconPapers (1)

Published in Transportation Research Part D, Transport and Environment, 2000, pages 419-431.

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