Green Drivers or Free Riders? An Analysis of Tax Rebates for Hybrid Vehicles
University of Toronto - Rotman School of Management
University of British Columbia - Food and Resource Economics
University of British Columbia (UBC)
January 20, 2010
Journal of Environmental Economics and Management, Vol. 60, No. 2, 2010
We estimate the effect of tax rebates offered by Canadian Provinces on the sales of Hybrid Electric Vehicles. We find that these rebates had a large and positive effect on the market share of hybrid vehicles and that Intermediate cars, Intermediate SUVs and some high performance compact cars were crowded out as a result. However, only 26% of the hybrid vehicles sold during the rebate programs can be attributed to the rebate. This implies that the rebate programs subsidized some consumers who would have either bought hybrid vehicles or other fuel-efficient vehicles in any case.
Consequently, the average cost of reducing carbon emissions from these programs is estimated to be $195 per tonne.
Number of Pages in PDF File: 45
Keywords: Tax Rebates, Hybrid Vehicles, Program Evaluation
JEL Classification: Q52, Q54, Q58
Date posted: February 26, 2009 ; Last revised: July 20, 2014
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