An Empirical Study of Alternative Fuel Vehicle Choice by Commercial Fleets: Lessons in Transportation Choices, and Public Agencies' Organization

The concern about air pollution has led government agencies to design and implement mandates to replace some commercial fleets’ gasoline vehicles with Alternative Fuel Vehicles (AFVs). In Part One of this dissertation, I investigate the diffusion of AFV’s in the commercial sector. Commercial fleets are frequently the first target of government regulation because policy agencies can target a large number of vehicles while regulating fewer establishments relative to the household sector. Using stated preference survey data from over 2000 commercial and local government fleets in California, I estimate multinomial logit and nested logit models of fuel choice that predict the probability of choosing each type of AFV. Given certain assumptions about vehicle technology, these models predict that starting in year 2010, almost 17% of new vehicle purchases by the commercial and local government fleets will be electric, about 20% will be compressed natural gas, and almost 21% will be methanol vehicles. I find that fuel choice probabilities differ depending on the market structure. Public agencies seem to be more AFV friendly than private firms. Important factors in fleet vehicle choice are the degree of familiarity of the firm’s staff with the AFV operation, the size of the establishment, government regulations, and the availability of the refueling infrastructure. In Part Two, I review hypotheses about the determinants of local government agencies’ efficiency and use the stated preference survey data to test these hypotheses. Public choice models predict systematic differences among government agencies regarding their cost considerations and sensitivity to environmental issues. The empirical evidence identifies two factors that affect government agencies’ performance. The first factor is jurisdiction: an agency that has a more rigid boundary, such as a city or a county, seems to operate more efficiently than an agency that has more flexible geographic boundaries, as is the case with the special districts. The second factor is direct citizen voting: an agency director who is subject to re-election seems to coordinate a more efficient agency operation than one that is appointed to the job as a career position.