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Assessing the rebound effect using a natural experiment setting: Evidence from the private transportation sector in Israel

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  • Steren, Aviv
  • Rubin, Ofir D.
  • Rosenzweig, Stav

Abstract

Subsidizing energy-efficient technologies is considered by energy and environmental organizations to be one of the most effective policies for decreasing energy consumption. In the transportation sector such policies are becoming ever more popular, and have been implemented in a considerable number of countries in recent years. Because these policies promote energy-efficient cars with lower usage costs, they may rebound and increase the distances traveled by households that have switched to energy-efficient cars. From an econometric perspective, a subsidization policy can be used as a valid instrument to identify the households’ choice of energy efficiency levels of the cars they own. This identification, in turn, can be utilized to account for endogeneity in the estimation of a rebound effect. The present study uses a natural experiment setting of such a policy implemented in Israel in 2009. The empirical results indicate a fairly large average rebound effect of 40%. The results also indicate that while the policy indeed encouraged the purchase of energy-efficient cars, households that bought a new or used car during the surveyed period did not generate a rebound effect of a different magnitude compared with other households that did not. We discuss the implications of our findings.

Suggested Citation

  • Steren, Aviv & Rubin, Ofir D. & Rosenzweig, Stav, 2016. "Assessing the rebound effect using a natural experiment setting: Evidence from the private transportation sector in Israel," Energy Policy, Elsevier, vol. 93(C), pages 41-49.
    • Handle: RePEc:eee:enepol:v:93:y:2016:i:c:p:41-49
    DOI: 10.1016/j.enpol.2016.02.038
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    Cited by:

    1. Li, Aijun & Peng, Dan & Wang, Daoping & Yao, Xin, 2017. "Comparing regional effects of climate policies to promote non-fossil fuels in China," Energy, Elsevier, vol. 141(C), pages 1998-2012.
    2. Dimitropoulos, Alexandros & Oueslati, Walid & Sintek, Christina, 2018. "The rebound effect in road transport: A meta-analysis of empirical studies," Energy Economics, Elsevier, vol. 75(C), pages 163-179.
    3. Jaraitė, Jūratė & Kurtyka, Oliwia & Ollivier, Hélène, 2022. "Take a ride on the (not so) green side: How do CDM projects affect Indian manufacturing firms’ environmental performance?," Journal of Environmental Economics and Management, Elsevier, vol. 114(C).
    4. Danny Harvey, L.D., 2017. "Implications for the floor price of oil of aggressive climate policies," Energy Policy, Elsevier, vol. 108(C), pages 143-153.
    5. Han, Hongyun & Zhou, Zinan, 2024. "The rebound effect of energy consumption and its determinants in China's agricultural production," Energy, Elsevier, vol. 290(C).
    6. Bongers, Anelí, 2024. "Household behavior and the rebound effect," Energy Economics, Elsevier, vol. 130(C).
    7. Zhang, Lei & Qin, Quande, 2018. "China’s new energy vehicle policies: Evolution, comparison and recommendation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 110(C), pages 57-72.

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