45 Pages Posted: 26 Feb 2009 Last revised: 20 Jul 2014
Date Written: January 20, 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.
Keywords: Tax Rebates, Hybrid Vehicles, Program Evaluation
JEL Classification: Q52, Q54, Q58
Suggested Citation: 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
By Matthew Kahn
By Edward Huang