Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.tranpol.2010.04.007
Title: Vehicle ownership and usage charges
Authors: Muthukrishnan, S. 
Keywords: Consumer welfare
D01
Fixed tax
H23
H31
R48
Revenue loss
Transport externalities
Usage tax
Variabilization
Issue Date: Nov-2010
Citation: Muthukrishnan, S. (2010-11). Vehicle ownership and usage charges. Transport Policy 17 (6) : 398-408. ScholarBank@NUS Repository. https://doi.org/10.1016/j.tranpol.2010.04.007
Abstract: We present a simple model to study the welfare effects of a shift from ownership to usage taxes for cars. We consider a model in which a single representative consumer derives utility from consuming two goods-consumption of motor vehicle kilometers, and an aggregate consumption good treated as numeraire. We characterize the optimal consumption of car kilometers by a representative car user and find that a shift from ownership towards usage taxes is not necessarily welfare-improving: while a revenue-neutral shift makes the representative car user worse off; a utility-neutral shift leads to a significant loss of revenue to the government. An empirical analysis based on Singapore data is also consistent with our theoretical results. © 2010 Elsevier Ltd.
Source Title: Transport Policy
URI: http://scholarbank.nus.edu.sg/handle/10635/124962
ISSN: 0967070X
DOI: 10.1016/j.tranpol.2010.04.007
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