Download this Paper Open PDF in Browser

Green Drivers or Free Riders? An Analysis of Tax Rebates for Hybrid Vehicles

45 Pages Posted: 26 Feb 2009 Last revised: 20 Jul 2014

Ambarish Chandra

University of Toronto - Rotman School of Management

Sumeet Gulati

University of British Columbia - Food and Resource Economics

Milind Kandlikar

University of British Columbia (UBC)

Date Written: January 20, 2010

Abstract

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.

Keywords: Tax Rebates, Hybrid Vehicles, Program Evaluation

JEL Classification: Q52, Q54, Q58

Suggested Citation

Chandra, Ambarish and Gulati, Sumeet and Kandlikar, Milind, Green Drivers or Free Riders? An Analysis of Tax Rebates for Hybrid Vehicles (January 20, 2010). Journal of Environmental Economics and Management, Vol. 60, No. 2, 2010. Available at SSRN: https://ssrn.com/abstract=1348808

Ambarish Chandra (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Sumeet Gulati

University of British Columbia - Food and Resource Economics ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada
+1 604-822-2144 (Phone)
+1 604-822-2184 (Fax)

HOME PAGE: http://www.landfood.ubc.ca/people/sumeet.gulati/

Milind Kandlikar

University of British Columbia (UBC) ( email )

2329 West Mall
Vancouver, British Columbia BC V6T 1Z4
Canada

Paper statistics

Downloads
525
Rank
42,843
Abstract Views
2,433