Conventional counterfactuals used in literature may underestimate fuel savings from clean vehicle adoption, thus overestimating the costs of securing associated environmental benefits. Using a large-scale nationally representative sample of U.S. new car buyers, we propose a choice model-based counterfactual approach to predict what consumers would purchase if clean vehicles were unavailable. We find that gasoline consumption under a no clean vehicle scenario increases by 1.7%, compared with 1.1% based on a conventional counterfactual. The conventional counterfactual overestimates the cost of gasoline savings from clean vehicle adoption incentives by $1.16 (27%) per gallon compared with the choice model-based counterfactual. © 2018 Elsevier Ltd
Visiting Researcher Tamara is a visiting researcher at KAPSARC and an assistant professor of economics in the Darla Moore School of Business at… Tamara is a visiting researcher at KAPSARC and an assistant professor of economics in the Darla Moore School of Business at the University of South Carolina. Her research interests include environmental and energy economics and how these fields interact with public policy. She holds a Ph.D. in Economics from the University of California, San Diego.