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The Effect of Taxes and Insurance Costs On Automobile Registrations in the United States

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  • Tim Pritchard

    (Ohio State University)

  • Larry DeBoer

    (Purdue University)

Abstract

We investigate the determinants of United States automobile registrations in states in 1986, focusing on state and local taxes and fees, and on auto insurance premiums. Using data on state tax and fee structures and the results of a phone survey of states where automobiles are subject to property taxes, we calculate tax and fee costs for a "new" and an "old" car. Regression results show that new car taxes have httle effect on registrations, probably because owners respond to higher taxes by buying older, cheaper cars. Higher old car taxes reduce registrations because low-income owners cannot buy older or cheaper cars and thereby abandon ownership. Insurance premiums appear to have a negative effect on registrations.

Suggested Citation

  • Tim Pritchard & Larry DeBoer, 1995. "The Effect of Taxes and Insurance Costs On Automobile Registrations in the United States," Public Finance Review, , vol. 23(3), pages 283-304, July.
    • Handle: RePEc:sae:pubfin:v:23:y:1995:i:3:p:283-304
    DOI: 10.1177/109114219502300301
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    References listed on IDEAS

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    Cited by:

    1. Dargay, Joyce & Gately, Dermot, 1999. "Income's effect on car and vehicle ownership, worldwide: 1960-2015," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(2), pages 101-138, February.
    2. Santos, Georgina & Behrendt, Hannah & Maconi, Laura & Shirvani, Tara & Teytelboym, Alexander, 2010. "Part I: Externalities and economic policies in road transport," Research in Transportation Economics, Elsevier, vol. 28(1), pages 2-45.
    3. Timilsina, Govinda R. & Dulal, Hari B., 2008. "Fiscal policy instruments for reducing congestion and atmospheric emissions in the transport sector : a review," Policy Research Working Paper Series 4652, The World Bank.
    4. M. Yu. Ksenofontov & S. R. Milyakin, 2018. "The Automobilization Process and Its Determining Factors in the Past, Present, and Future," Studies on Russian Economic Development, Springer, vol. 29(4), pages 406-414, July.
    5. Dargay, Joyce & Gately, Dermot, 1997. "Income's Effect On Car and Vehicle Ownership, Worldwide: 1960-2015," Working Papers 97-33, C.V. Starr Center for Applied Economics, New York University.
    6. John H. Beck & Randall W. Bennett, 2003. "Taxation, License Fees, and New Car Registrations," Public Finance Review, , vol. 31(5), pages 487-509, September.

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