Abstract
We study the effects of eco-Iabeling and tax incentives on the composition of the car park. To this end, we model the utility to the consumer from owning a given car model, taking into account that cars are consumer durables. A discrete choice model is used to obtain functions for the aggregate demand for each car model. The auto producers are modelled as price setting producers of differentiated goods. The model is estimated on a comprahensive and detailed data set over the sales of different car models in Sweden over the period 1991-1997, using instrumental variable estimation in a panel data setting. Taxes, exept for the fuel tax, seem to have had a limited role in changing the composition of the car park in a "green" direction. In contradistinction, an attempt to use "eco-Iabeling" to reach this objective appears to have been successful.