Please use this identifier to cite or link to this item: http://hdl.handle.net/1893/10268
Appears in Collections:Economics Journal Articles
Peer Review Status: Refereed
Title: The taxation of drivers and the choice of car fuel type
Authors: Rouwendal, Jan
de, Vries Frans
Contact Email: f.p.devries@stir.ac.uk
Keywords: Car fuel tax
Gasoline demand
Automobile demand
Issue Date: Feb-1999
Publisher: Elsevier
Citation: Rouwendal J & de Vries F (1999) The taxation of drivers and the choice of car fuel type, Energy Economics, 21 (1), pp. 17-35.
Abstract: In this paper the choice of the car fuel type is studied. In the Dutch situation three types are important: gasoline, diesel and LPG, with 80% of the cars using gasoline. Incentives for using diesel or LPG are provided by the tax system that implies higher fixed cost, but lower variable cost for users of these fuel types. We start by studying fuel type choice on the basis of a logit model, and move on to estimate demand functions for kilometres driven for social purposes while correcting for the possible selectivity bias. We find that diesel and LPG are in general regarded as inferior alternatives, but that monetary incentives are sufficiently strong to overcome this hurdle for drivers with a large demand for kilometres. We also find that there are significant effects of the lower variable cost for diesel and LPG drivers on their demand for kilometres. The conclusions are confirmed by estimation of a structural model in which fuel type choice and demand for kilometres are consistently explained on the basis of one set of preferences and unobserved heterogeneity is taken into account.
Type: Journal Article
URI: http://hdl.handle.net/1893/10268
DOI Link: http://dx.doi.org/10.1016/S0140-9883(98)00021-8
Rights: The publisher does not allow this work to be made publicly available in this Repository. Please use the Request a Copy feature at the foot of the Repository record to request a copy directly from the author. You can only request a copy if you wish to use this work for your own research or private study.
Affiliation: Wageningen Agricultural University, The Netherlands
Economics

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