Abstract
PurposeThe introduction of novel fuel and propulsion technologies, such as battery, (plug-in) hybrid and fuel cell electric vehicles, and the need to combat the exhaust emission of local and global pollutants from the passenger car fleet have enhanced the political interest in the vehicle purchase choices made by private households and firms, and in how these choices can be influenced through fiscal and regulatory penalties and incentives.MethodsAs a tool to understand and analyse such questions, we have developed a generic nested logit model of automobile choice, based on complete disaggregate vehicle sales data for Norway for the period ranging from January 1996 until July 2011. The data set contains 1.6 million vehicle transactions.ResultsBeing sensitive to changes in the vehicle purchase tax and the fuel tax, the model discriminates well between various fiscal policy scenarios. In using the model for such purposes, one is greatly helped by the fact that the model distinguishes between price changes due to taxation and those originating from the manufacturing or marketing side.ConclusionsThe strongly CO2 graduated vehicle purchase tax, with exemptions granted for battery electric vehicles, is shown to have a major impact on the average type approval rate of CO2 emissions from new passenger cars registered in Norway. The fuel tax also helps induce car customers to buy low emission vehicles.
Highlights
Since the seminal papers by Lave and Train [24] and Manski and Sherman [25], automobile demand and vehicle choice have been the subjects of multiple studies by transport researchers
Some are based on aggregate sales data, whereby one estimates total demand or market shares held by various vehicle models (e.g., [1, 5, 14, 20, 22])
Common to most of these studies is that their data sets and methodology are too crude or too incomplete to allow for reliable predictions of the car fleet composition under varying fiscal and regulatory policy options
Summary
Since the seminal papers by Lave and Train [24] and Manski and Sherman [25], automobile demand and vehicle choice have been the subjects of multiple studies by transport researchers. Some are based on aggregate sales data, whereby one estimates total demand or market shares held by various vehicle models (e.g., [1, 5, 14, 20, 22]). In Norway, a large number of incentives have been implemented over the last 10–12 years, most importantly a steeply CO2-graduated vehicle purchase tax. These incite a growing number of car buyers to prefer low and zero emission. In all of the simulations, it has been assumed that tax changes are passed on 100% to the buyers, through corresponding changes in the retail price
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
