Effects of Redistributive Tax Policies on Fuel Demand
Name
tricot-ltricot-msms-sloan-2023-thesis.pdf
Description
Thesis PDF
Size
771.65 KB
Format
Adobe PDF
Checksum (MD5)
de26bbc793c80f169d2e4e42f003fddc
Author(s)
Tricot, Loan
Advisor(s)
Li, Jing
Date Issued
June 2023
Publisher
Massachusetts Institute of Technology
Abstract
The objective of this study is to evaluate the efficiency of policies aimed at reducing fuel demand. A model is developed to illustrate the channels through which policies --- such as fuel taxes and electric vehicle subsidies --- affect fuel demand. The model is based on a consumer theory framework at the household level. I model consumption of fuel and vehicles simultaneously and study the consumer's choice between a combustion vehicle and an electric vehicle. The study underlines the role of income elasticity of vehicle miles traveled in consumers' vehicle choice, and explores the policy implications of this role. The National Household Travel Survey's data is used to uncover stylized facts of fuel demand, which I compare with those exhibited by my model. Studying this subject is crucial for understanding and enhancing the effectiveness of policies aimed at reducing fuel demand, which is key to addressing climate change by promoting sustainable transport options.
MIT Department
Sloan School of Management
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In Copyright - Educational Use Permitted
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