TY  - JOUR
AU  - Feng,Ye
AU  - Fullerton,Don
AU  - Gan,Li
TI  - Vehicle Choices, Miles Driven, and Pollution Policies
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11553
PY  - 2005
Y2  - August 2005
UR  - http://www.nber.org/papers/w11553
L1  - http://www.nber.org/papers/w11553.pdf
N1  - Author contact info:
Ye Feng
University of Texas
E-Mail: yfeng@eco.utexas.edu

Don Fullerton
Department of Finance
University of Illinois
BIF Box#30 (MC520)
515 East Gregory Drive
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu

Li Gan
Department of Economics
Texas A&M University
College Station, TX 77843-4228
Tel: 979/862-1667
Fax: 979/847-8747
E-Mail: gan@econmail.tamu.edu
M2  - featured in NBER digest on 2005-08-15
AB  - Mobile sources contribute large percentages of each pollutant, but technology is not yet available to measure and tax emissions from each vehicle. We build a behavioral model of household choices about vehicles and miles traveled. The ideal-but-unavailable emissions tax would encourage drivers to abate emissions through many behaviors, some of which involve market transactions that can be observed for feasible market incentives (such as a gas tax, subsidy to new cars, or tax by vehicle type). Our model can calculate behavioral effects of each such price and thus calculate car choices, miles, and emissions.
	A nested logit structure is used to model discrete choices among different vehicle bundles. We also consider continuous choices of miles driven and the age of each vehicle. We propose a consistent estimation method for both discrete and continuous demands in one step, to capture the interactive effects of simultaneous decisions. Results are compared with those of the traditional sequential estimation procedure.
ER  -