Welfare Implications of Electric-Bike Subsidies: Evidence from Sweden

39 Pages Posted: 11 Mar 2022 Last revised: 6 Dec 2022

See all articles by Anders Anderson

Anders Anderson

Swedish House of Finance; Stockholm School of Economics - Department of Finance; Mistra Center for Sustainable Markets

Harrison G. Hong

Columbia University, Graduate School of Arts and Sciences, Department of Economics; National Bureau of Economic Research (NBER)

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Date Written: December 2, 2022

Abstract

We evaluate a large-scale Swedish electric bike (E-bike) subsidy program in 2018, similar to those implemented in many other countries. We combine administrative, insurance and survey data to address challenges of welfare analyses such as non-additionality. We find (1) complete pass through of the average $494 subsidy to consumers, (2) a near doubling of E-bikes sold but one-third of the adopters are non-additional, and (3) a savings of 1.3 tons of carbon emissions during the life of the E-bike. At a cost of $589 per ton, the program is an expensive way to reduce carbon emissions from driving.

Keywords: Electric bikes, subsidies, welfare analysis

JEL Classification: I18, D10

Suggested Citation

Anderson, Anders and Hong, Harrison G., Welfare Implications of Electric-Bike Subsidies: Evidence from Sweden (December 2, 2022). Swedish House of Finance Research Paper No. 22-02, Available at SSRN: https://ssrn.com/abstract=4054168 or http://dx.doi.org/10.2139/ssrn.4054168

Anders Anderson (Contact Author)

Swedish House of Finance ( email )

Drottninggatan 98
111 60 Stockholm
Sweden

Stockholm School of Economics - Department of Finance ( email )

SE-113 83 Stockholm
Sweden

Mistra Center for Sustainable Markets ( email )

Stockholm

Harrison G. Hong

Columbia University, Graduate School of Arts and Sciences, Department of Economics ( email )

420 W. 118th Street
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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