Gasoline Prices, Government Support, and the Demand for Hybrid Vehicles in the U.S.
42 Pages Posted: 26 Feb 2009 Last revised: 12 Oct 2009
Date Written: February 26, 2009
Abstract
We analyze the determinants in the demand for hybrid vehicles and examine government programs that aim to promote the adoption of these vehicles. We find that hybrid vehicle sales in 2006 would have been 37 percent lower had gasoline prices stayed at the 1999 levels while the effect of the federal income tax credit program is estimated at 20 percent in 2006. Our results suggest that under the income tax credit program, the cost of reducing gasoline consumption was $75 per barrel in government revenue and that of CO2 emission reduction was $177 per ton. We show that the cost-effectiveness of federal tax programs can be improved by adopting a flat rebate scheme.
Keywords: Hybrid cars, gasoline prices,demand estimation
JEL Classification: L62, Q4, Q5
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Giving Green to Get Green: Incentives and Consumer Adoption of Hybrid Vehicle Technology
-
Green Drivers or Free Riders? An Analysis of Tax Rebates for Hybrid Vehicles
By Ambarish Chandra, Sumeet Gulati, ...
-
By Sharon Shewmake and Lovell S. Jarvis
-
Using Non-Pecuniary Strategies to Influence Behavior: Evidence from a Large Scale Field Experiment
By Paul J. Ferraro and Michael K. Price
-
By Maria Bockarjova, Piet Rietveld(deceased), ...
-
Do Public Subsidies Sell Green Cars? Evidence from the U.S. 'Cash for Clunkers' Program
By Edward Huang
-
By Corrado Di Maria, Susana Ferreira, ...