Business Publications
Document Type
Article
Publication Date
2-2017
Volume
50
Issue
1
Journal
Canadian Journal of Economics
First Page
201
URL with Digital Object Identifier
https://doi.org/10.1111/caje.12255
Last Page
232
Abstract
New vehicle feebate programs encourage improved fleet‐wide vehicle fuel efficiency; yet analyses of these policies have been limited to ad hoc proposals. In this paper, we exploit an extensive, multi‐year dataset which includes more than 16 million observations to evaluate the welfare implications of a long‐standing vehicle feebate program in the Canadian province of Ontario. We: (1) show that second‐best optimal feebates can be written as a function of new vehicle Pigouvian taxes; (2) find that Ontario's feebate program was welfare‐enhancing relative to a no feebate scenario but that a second‐best optimal benchmark would have yielded additional welfare while reducing fleet‐wide emissions; and (3) find that Ontarian consumers responded asymmetrically to fees versus rebates.
Notes
This is the author-approved version of an article published in the Canadian Journal of Economics. The final published article can be found at https://doi.org/10.1111/caje.12255