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Ian Irvine
''The Marginal Social Value of Electric Vehicle Subsidies - Preliminary Evidence''
( 2017, Vol. 37 No.1 )
This paper estimates the distributional impact of electric vehicle subsidies. While micro-data that would establish their exact impact, are not yet available, other data sources provide strong priors that can be used to evaluate their distributional consequences. Using a social evaluation function, and modelling the income distribution using the Pareto function, these subsidies are found to be enormously regressive. This regressivity has become particularly marked due to the changing sales pattern, between 2013 and 2015, in favor of luxury brands. The paper also demonstrates that an analysis of the distributional impact of the subsidies can be validly separated from potential efficiency gains associated with reduced greenhouse gases. This separation is possible because of the way in which current vehicle-attribute standards influence producer decisions, and hence greenhouse gas emissions.
Keywords: Electric vehicles, subsidies, equity, efficiency, deadweight loss, Pareto distribution
JEL: H2 - Taxation, Subsidies, and Revenue: General
Q5 - Environmental Economics: General
Manuscript Received : Oct 20 2016 Manuscript Accepted : Jan 17 2017

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