A Model to Evaluate Vehicle Emission Incentive Policies in Japan
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Date
2014-06-01
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Private Enterprise Research Center, Texas A&M University
Abstract
Using three years of data from the 47 prefectures of Japan, the authors estimate behavior of households who simultaneously make discrete decisions about vehicle ownership and continuous decisions about driving distance. Estimated parameters are to calculate elasticities and to simulate the effects of alternative pollution control policies such as taxes on gasoline, on distance, or on particular cars. Given choices about cars and distance, we also calculate emissions. Since the author's model simultaneous choices, both the chosen distance and the chosen car can be affected either by a tax on distance or by a tax on car characteristics. Findings show expected signs for coefficients on price and income. Car choices are relatively inelastic, however, either to taxes on cars or to taxes on gas or distance. Thus emissions are more affected by taxes on gasoline than by taxes on particular vehicles. Given that the existing gas tax already achieves some abatement, mostly through driving reduction, this analysis suggests that further abatement from the use of distance-reducing taxes is more costly than achieving some marginal abatement from induced changes in car choices. The option with the lowest cost is to tax each car at a rate proportional to its emission rate.
Description
Macroeconomics
Keywords
1406, Discrete, Continuous model, Environment, Pollution, Taxes, Macroeconomics