A tale of two tails: Commuting and the fuel price response in driving

Pricing greenhouse gases is widely understood as the most efficient approach for mitigating climate change, yet distributional effects hamper political acceptance. These distributional effects are especially important in transport, the fastest growing sector for greenhouse gas emissions. Using rich...

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Bibliographic Details
Published inJournal of urban economics Vol. 109; pp. 27 - 40
Main Authors Gillingham, Kenneth, Munk-Nielsen, Anders
Format Journal Article
LanguageEnglish
Published Elsevier Inc 01.01.2019
Subjects
Commuting
Distributional effects
Environmental taxes
Transportation
Urban form
R2
Urban form
Environmental taxes
R4
Q4
Transportation
H2
Distributional effects
Commuting
L9
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Summary:Pricing greenhouse gases is widely understood as the most efficient approach for mitigating climate change, yet distributional effects hamper political acceptance. These distributional effects are especially important in transport, the fastest growing sector for greenhouse gas emissions. Using rich data covering the entire population of vehicles and households in Denmark, this study uncovers an important feature of driving demand: two groups of much more responsive households in the lower and upper tails of the work distance distribution. We further estimate the causal effect of public transport–a critical determinant of the upper tail–and show how public transport access can both reconcile differences in fuel price elasticities between the United States and Europe, and considerably influence the distributional effects of fuel pricing.
ISSN:0094-1190
1095-9068
DOI:10.1016/j.jue.2018.09.007