Abstract
We analyze the impact of state and local incentives on household ownership of hybrid electric vehicles (HEVs) while accounting for their socio-economic characteristics. Our large dataset combines household data from the 2009 National Household Travel Survey (NHTS) with zip code-level retail gas prices and congestion data from the Texas Transportation Institute, as well as information about state and city incentives. These incentives include unrestricted HOV access, income tax credit, sales tax rebates, and city parking privileges. By contrast, studies published so far focused on just one or two incentives and/or they analyzed only their local impact. We find that unrestricted access to HOV lanes paired with a parking incentive or sales tax rebates/exemptions can effectively promote household ownership of HEVs; by contrast, state income tax credits do not appear to have a statistically significant impact. Moreover, our results indicate that households are more likely to purchase HEVs in areas where gasoline prices are higher, which suggests that increasing gasoline tax could effectively promote HEVs. Understanding the effectiveness of various government policies is important at a time when there is renewed interest in promoting HEVs to address our dependence on foreign oil, air pollution and global warming.