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The Phase-Out of Leaded Gasoline in the EU: A Successful Failure?

Author

Listed:
  • Löfgren, Åsa

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

  • Hammar, Henrik

    (Department of Economics, School of Economics and Commercial Law, Göteborg University)

Abstract

The objective of this paper is to analyze in both descriptive and econometric terms the phase-out of leaded gasoline consumption in the EU countries. The phase-out process is characterized by increased consumption of unleaded gasoline. We analyze the importance of price differences, share of catalytic converters, income per capita, and country characteristics in the phase-out process. Since the expected maintenance costs of using unleaded gasoline in cars without catalytic converters compared to the use of leaded gasoline differ insignificantly according to available evidence, and consumers still use leaded gasoline even though unleaded gasoline is cheaper; we interpret this as a lack of reliable information. The results indicate that countries, which have not yet phased out leaded gasoline, should do this by either banning leaded gasoline or by increasing the tax differential between leaded and unleaded gasoline depending on the objective of the social planner.

Suggested Citation

  • Löfgren, Åsa & Hammar, Henrik, 1999. "The Phase-Out of Leaded Gasoline in the EU: A Successful Failure?," Working Papers in Economics 19, University of Gothenburg, Department of Economics.
  • Handle: RePEc:hhs:gunwpe:0019
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    Cited by:

    1. Charles Raux, 2002. "The Use of Transferable Permits in the Transport Sector," Post-Print halshs-00080454, HAL.

    More about this item

    Keywords

    Leaded gasoline; unleaded gasoline; policy instruments; tax differential;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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