Cost-Effective Policies to Reduce Vehicle Emissions

Don Fullerton () and Li Gan ()

No 11174, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses an estimated demand system that accounts for heterogeneity to calculate and compare the lost consumer surplus from a higher tax on gasoline, a tax on distance, or a subsidy for buying a newer car. We introduce a view of cost-effectiveness that compares policies instead of technologies. Each tax might induce some consumers to drive less, some to switch from two vehicles to one, and some to buy a car instead of an SUV. Our model captures these behaviors. For each rate of tax, we simulate the changes in all such choices and how the new choices affect emissions. We also calculate the equivalent variation and subtract tax revenue to get deadweight loss. Finally, we take the added deadweight loss over the additional abatement as the social marginal cost of abatement, and we plot this curve for several different tax policies.

JEL-codes: H2 Q5 (search for similar items in EconPapers)
Date: 2005-03
New Economics Papers: this item is included in nep-env, nep-res and nep-ure
Note: PE EEE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

Published as Fullerton, Don and Li Gan. "Cost-Effective Policies To Reduce Vehicle Emissions," American Economic Review, 2005, v95(2,May), 300-304.

Downloads: (external link)
http://www.nber.org/papers/w11174.pdf (application/pdf)

Related works:
Journal Article: Cost-Effective Policies to Reduce Vehicle Emissions (2005)
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:11174

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w11174

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 ().