IDEAS home Printed from https://ideas.repec.org/p/cdl/itsdav/qt7p19k8c6.html
   My bibliography  Save this paper

Do Electricity Prices Affect Electric Vehicle Adoption?

Author

Listed:
  • Bushnell, James PhD
  • Muehlegger, Erich PhD
  • Rapson, David PhD

Abstract

This report presents evidence that gasoline prices have a larger effect on demand for battery electric vehicles (BEVs) than do electricity prices in California. A spatially-disaggregated panel dataset of monthly BEV registration records was matched to detailed records of gasoline and electricity prices in California from 2014-2017, and the matched data was used to estimate the effect of energy prices on BEV demand. Two distinct empirical approaches (panel fixed-effects and a utility-border discontinuity) yield remarkably similar results: a given change in gasoline prices has roughly four times the effect on BEV demand as a similar percentage change in electricity prices.

Suggested Citation

  • Bushnell, James PhD & Muehlegger, Erich PhD & Rapson, David PhD, 2021. "Do Electricity Prices Affect Electric Vehicle Adoption?," Institute of Transportation Studies, Working Paper Series qt7p19k8c6, Institute of Transportation Studies, UC Davis.
    • Handle: RePEc:cdl:itsdav:qt7p19k8c6
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/7p19k8c6.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lucas W. Davis & Gilbert E. Metcalf, 2016. "Does Better Information Lead to Better Choices? Evidence from Energy-Efficiency Labels," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 589-625.
    2. Kenneth T. Gillingham & Sébastien Houde & Arthur A. van Benthem, 2021. "Consumer Myopia in Vehicle Purchases: Evidence from a Natural Experiment," American Economic Journal: Economic Policy, American Economic Association, vol. 13(3), pages 207-238, August.
    3. Anderson, Soren T. & Kellogg, Ryan & Sallee, James M., 2013. "What do consumers believe about future gasoline prices?," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 383-403.
    4. Shanjun Li & Lang Tong & Jianwei Xing & Yiyi Zhou, 2017. "The Market for Electric Vehicles: Indirect Network Effects and Policy Design," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(1), pages 89-133.
    5. Meghan R. Busse & Christopher R. Knittel & Florian Zettelmeyer, 2013. "Are Consumers Myopic? Evidence from New and Used Car Purchases," American Economic Review, American Economic Association, vol. 103(1), pages 220-256, February.
    6. Allcott, Hunt & Mullainathan, Sendhil & Taubinsky, Dmitry, 2014. "Energy policy with externalities and internalities," Journal of Public Economics, Elsevier, vol. 112(C), pages 72-88.
    7. Severin Borenstein & Lucas W. Davis, 2016. "The Distributional Effects of US Clean Energy Tax Credits," Tax Policy and the Economy, University of Chicago Press, vol. 30(1), pages 191-234.
    8. Stephen P. Holland & Erin T. Mansur & Nicholas Z. Muller & Andrew J. Yates, 2016. "Are There Environmental Benefits from Driving Electric Vehicles? The Importance of Local Factors," American Economic Review, American Economic Association, vol. 106(12), pages 3700-3729, December.
    9. Sallee, James M. & West, Sarah E. & Fan, Wei, 2016. "Do consumers recognize the value of fuel economy? Evidence from used car prices and gasoline price fluctuations," Journal of Public Economics, Elsevier, vol. 135(C), pages 61-73.
    10. Hunt Allcott & Nathan Wozny, 2014. "Gasoline Prices, Fuel Economy, and the Energy Paradox," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 779-795, December.
    11. Koichiro Ito, 2014. "Do Consumers Respond to Marginal or Average Price? Evidence from Nonlinear Electricity Pricing," American Economic Review, American Economic Association, vol. 104(2), pages 537-563, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul D. Larson & Robert V. Parsons & Deepika Kalluri, 2024. "Zero-Emission Heavy-Duty, Long-Haul Trucking: Obstacles and Opportunities for Logistics in North America," Logistics, MDPI, vol. 8(3), pages 1-35, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Houde, Sébastien & Myers, Erica, 2021. "Are consumers attentive to local energy costs? Evidence from the appliance market," Journal of Public Economics, Elsevier, vol. 201(C).
    2. Bishop, Kelly C. & Kiribrahim-Sarikaya, Ozgen, 2024. "Energy-efficient investments in housing," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    3. Lu, Tingmingke, 2023. "Response of new car buyers to alternative energy policies: The role of vehicle use heterogeneity," Economic Modelling, Elsevier, vol. 120(C).
    4. Todd D. Gerarden & Richard G. Newell & Robert N. Stavins, 2017. "Assessing the Energy-Efficiency Gap," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1486-1525, December.
    5. Stefan Lamp, 2023. "Sunspots That Matter: The Effect of Weather on Solar Technology Adoption," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 1179-1219, April.
    6. Lucas W. Davis & James M. Sallee, 2020. "Should Electric Vehicle Drivers Pay a Mileage Tax?," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 1(1), pages 65-94.
    7. Jacobsen, Grant D., 2015. "Do energy prices influence investment in energy efficiency? Evidence from energy star appliances," Journal of Environmental Economics and Management, Elsevier, vol. 74(C), pages 94-106.
    8. Myers, Erica, 2020. "Asymmetric information in residential rental markets: Implications for the energy efficiency gap," Journal of Public Economics, Elsevier, vol. 190(C).
    9. Leard, Benjamin, 2018. "Consumer inattention and the demand for vehicle fuel cost savings," Journal of choice modelling, Elsevier, vol. 29(C), pages 1-16.
    10. Patrick Bigler & Doina Maria Radulescu, 2022. "Environmental, Redistributive and Revenue Effects of Policies Promoting Fuel Efficient and Electric Vehicles," CESifo Working Paper Series 9645, CESifo.
    11. Li, Shanjun & Wang, Binglin & Zhou, Hui, 2024. "Decarbonizing passenger transportation in developing countries: Lessons and perspectives1," Regional Science and Urban Economics, Elsevier, vol. 107(C).
    12. Cattaneo, Cristina, 2018. "Internal and External Barriers to Energy Efficiency: Made-to-Measure Policy Interventions," CSI: Climate and Sustainable Innovation 269536, Fondazione Eni Enrico Mattei (FEEM).
    13. Soren T. Anderson & James M. Sallee, 2016. "Designing Policies to Make Cars Greener: A Review of the Literature," NBER Working Papers 22242, National Bureau of Economic Research, Inc.
    14. Kellogg, Ryan, 2020. "Output and attribute-based carbon regulation under uncertainty," Journal of Public Economics, Elsevier, vol. 190(C).
    15. Cattaneo, Cristina, 2018. "Internal and External Barriers to Energy Efficiency: Made-to-Measure Policy Interventions," CSI: Climate and Sustainable Innovation 269536, Fondazione Eni Enrico Mattei (FEEM).
    16. Arakawa, Kiyoshi, 2022. "Assessing consumer valuations of future costs versus purchase prices in Japan's auto market," Economics of Transportation, Elsevier, vol. 30(C).
    17. Greene, David L. & Welch, Jilleah G., 2018. "Impacts of fuel economy improvements on the distribution of income in the U.S," Energy Policy, Elsevier, vol. 122(C), pages 528-541.
    18. Sahari, Anna, 2021. "Household heterogeneity in valuation of heating energy costs," Working Papers 141, VATT Institute for Economic Research.
    19. Verboven, Frank & Grigolon, Laura & Reynaert, Mathias, 2014. "Consumer valuation of fuel costs and the effectiveness of tax policy: Evidence from the European car market," CEPR Discussion Papers 10301, C.E.P.R. Discussion Papers.
    20. Huse, Cristian & Lucinda, Claudio & Ribeiro, Andre, 2021. "Assessing the effects of a large temporary energy savings program: Evidence from a developing country," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).

    More about this item

    Keywords

    Social and Behavioral Sciences; Electric vehicles; prices; operating costs; demand; electricity; gasoline; empirical methods; consumer behavior;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:itsdav:qt7p19k8c6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/itucdus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.