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Can subsidy programs change the customer base of next-generation vehicles?

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Listed:
  • Jiaxing Wang

    (Department of Economics, Aoyama Gakuin University. 4-4-25 Shibuya, Shibuya-ku, Tokyo, 150-8366, Japan.)

  • Shigeru Matsumoto

    (Department of Economics, Aoyama Gakuin University. 4-4-25 Shibuya, Shibuya-ku, Tokyo, 150-8366, Japan.)

Abstract

Although many countries have implemented subsidy programs for next-generation vehicles in order to reduce energy consumption and greenhouse gas emissions from the transportation sector, the effect of such programs has not yet been fully investigated in terms of their influence of households f vehicle selection. The Japanese government introduced a subsidy program entitled gEco-car h during 2009 and 2012. In this study, we apply multinomial logit models to micro-level data of vehicle selection from the National Survey of Family Income and Expenditure in order to identify the types of households who switched from conventional gasoline vehicles to hybrid electric vehicles (HEVs) using this subsidy program. Our analyses demonstrate that higher income households who used compact gasoline vehicles (CGVs) before the Eco-car program switched to HEVs using the subsidy, whereas those who used regular gasoline vehicles (RGVs) did not switched to HEVs. Although seniors chose HEVs over CGVs before the Eco-car program, younger consumers began choosing HEVs over CGVs after the Eco-car program. We also find that gasoline price became a less important factor on HEV purchase after the Eco-car program.

Suggested Citation

  • Jiaxing Wang & Shigeru Matsumoto, 2019. "Can subsidy programs change the customer base of next-generation vehicles?," RIEEM Discussion Paper Series 1904, Research Institute for Environmental Economics and Management, Waseda University.
    • Handle: RePEc:was:dpaper:1904
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Eco-car program; Hybrid electric vehicles; Micro-level data; Multinomial logit model;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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