PUBLICATIONS
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We evaluate the effect of vehicle recalls on vehicle transactions in the second-hand market. Using a rich dataset of Dutch vehicle registrations, we exploit the quasi-experimental variation in recalls across nearly-identical cars. We find strong heterogeneities across market segment: transactions increased for cars with lower listed price or with defects, and decreased for those with higher price or no defects. Based on our theoretical model, this suggests that recalls increase sorting in low-end markets, yet exacerbate adverse selection in high-end markets. Our results shed light on the effect of information arrival in markets subject to uncertainty and information asymmetries.
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Isolating the role of limited knowledge, psychological frictions and policy characteristics is key when evaluating a public program and designing future policies. We document limited awareness about the presence of fiscal incentives towards fuel efficient vehicles. Exploiting a direct measure of awareness at the individual level, we find vehicle choices response heterogeneity to these fiscal incentives between aware and unaware individuals. To estimate the effect of awareness, we leverage a field experiment randomizing information about the mere existence of the fiscal incentives. We show the simple intervention substantially increases policy awareness among vehicle buyers and affects consumers' vehicle choices. Further, we find increased awareness induces consumers to purchase vehicles that consume less fuel. Together, our findings highlight that limited awareness represents a critical barrier to the effectiveness of public programs.
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This chapter describes the motives and objectives of pricing transport externalities like carbon emissions (CO2). The main emitter of CO2 in the transport sector is road traffic, and much of that is due to the usage of cars. The focus of the chapter when describing different policies used to reduce CO2 emissions from transport activities, therefore, is policies addressing emissions related to cars and light vehicles in general. The chapter describes a range of polices, some with the purpose of influencing the usage of cars, and others, car ownership.
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This paper surveys policy instruments aiming at reducing carbon emissions from road transport. We present the basic economic framework used to evaluate environmental policy instruments and discuss the challenges and limitations it faces, which are important enough to justify departures from the first-best instrument (Pigouvian tax). We then discuss a number of policy instruments, including fuel and mileage taxes, standards, different forms of vehicle taxes, feebates, scrappage and information programs, as well as congestion pricing, driving restrictions, and public transport policies. We aim to strike a balance between real-life applications and economic intuition, emphasizing pros and cons of policy instruments as well as the margins they affect, all to provide the reader with a well-rounded view of the topic. We conclude by discussing how the impending changes in the transport sector, such as the diffusion of new technologies and business models, are expected to call for new solutions from policy-makers.
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Policymakers have been considering vehicle and fuel taxes to reduce transportation greenhouse gas emissions, but there is little evidence on the relative efficacy of these approaches. We examine an annual vehicle registration tax, the vehicle excise duty (VED), which is based on carbon emissions rates. The UK first adopted the system in 2001 and made substantial changes to it in the following years. Using a highly disaggregated dataset at the trim-variant level of UK registrations and characteristics of new cars, we estimate the effect of the VED on new vehicle registrations and their carbon emissions. The VED increased the adoption of low-emissions vehicles and discouraged the purchase of very polluting vehicles, but it had a small effect on aggregate emissions. Using the empirical estimates, we compare the VED with two hypothetical taxes: a tax proportional to carbon emissions per kilometer, and a carbon tax. The VED reduces total emissions from new cars twice as much as the emissions rate tax but by half as much as the emissions tax. Much of the advantage of the emissions tax arises from adjustments in miles driven, rather than the composition of the new car sales.
WORKING PAPERS
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Vehicle accidents represent an important source of externalities from driving, and their frequency and severity is strongly affected by vehicle speed. We explore the role of 30 km/h speed limits in mitigating vehicle accident severity in built-up areas. Using a detailed dataset on accident location and characteristics in Switzerland, we exploit the variation in accident severity and speed limit to estimate the effect of switching from a 50 km/h limit to 30 km/h on the probability of accident injuries. We complement our analysis with a difference in difference strategy focused on the municipality of Basel. We find a significant effect of lower speed limits on accident severity, and substantial heterogeneities based on the circumstances of the accident.
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Electrification of the private passenger transport sector is a fundamental milestone in reducing global carbon emissions. To reach this goal, several governments introduced a series of incentive programs to encourage the adoption of battery electric vehicles (BEVs). Two of the most widespread policies to incentivize the adoption of BEVs are discounts on the annual vehicle circulation tax and purchase rebates. This paper analyzes the causal relationship between introducing these two policies and adopting battery-electric vehicles (BEVs) in Switzerland. We also examine the effect of the diffusion of rooftop solar PV on the adoption of BEVs. We find that purchase rebates for BEVs positively affect their adoption, while the discount on the circulation tax has a minor or no effect. However, the cost effectiveness of both policies remains low because of a free-riding problem, i.e. all buyers of a BEV are entitled to the incentives, including those who would have bought a car even in their absence. The diffusion of solar PV facilitates the adoption of BEVs.
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To overcome the inherent clash between the ever-increasing push for electrification in the transportation and heating sectors, and the intermittent nature of renewable energy sources, demand response solutions such as direct load control (DLC) tariffs are receiving growing attention from researchers and policymakers. The present study aims to investigate the impact of two measures (i.e. a video intervention and an upfront subsidy) in increasing the acceptance rates of an existing DLC tariff targeted at electric vehicle charging stations and heat pumps in Switzerland. To achieve this, we combine two randomized controlled trials: (1) a stated-choice contingent valuation on electric vehicle owners to confirm the validity of the upfront susbidy, and (2) a revealed-preference field experiment on an existing DLC tariff proposed to the clients of a local distribution system operator. Results suggest that both measures of video and monetary intervention increase contact and subscription rates to the proposed DLC tariff, although the monetary intervention appears to be more convincing to consumers. Further, we use these results in combination with a bottom-up electricity market model to simulate the consequences on the level of system cost of a large-scale implementation of a DLC tariff.
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Replacing combustion engine vehicles with battery electric vehicles (BEV) is essential to achieving climate objectives and advancing sustainable transportation, aligning with the United Nations Development Goals and the Paris Agreement. In this project, we identify three perception biases linked to EV adoption and address them with personalized non-monetary information treatments to increase the adoption of BEVs among owners of internal combustion engine vehicles. In a randomized controlled trial with 3181 car owners, we measure the extent of perception biases about range anxiety, charging anxiety, and total cost of ownership (TCO). We find that individuals have strong misperceptions related to these three aspects. In a randomized control trial setting, we then introduce three personalized information interventions to correct each of these biases, based on actual driving and parking behavior. Our results show that these treatments, and especially the TCO information treatment, are effective in increasing purchase preferences toward BEVs.