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Subsidizing Mass Adoption of Electric Vehicles: Quasi-Experimental Evidence from California
March 1, 2019 @ 3:30 pm - 5:30 pm
Erich Muehlegger, Associate Professor
Department of Economics, UC Davis
Little is known about demand for EVs in the mass market. In this paper, we exploit a natural experiment that provides variation in large EV subsidies targeted at low- and middle-income households in California. Using transaction-level data, we estimate two important policy parameters using triple differences: the subsidy elasticity of demand for EVs and the rate of subsidy pass-through. Estimates show that demand for EVs amongst low- and middle-income households is price-elastic and pass-through is complete. We use these estimates to calculate the expected subsidy bill required for California to reach its goal of 1.5 million EVs by 2025.
Bio: Erich Muehlegger is an Associate Professor of Economics and Chair of the Graduate Program at UC Davis, as well as a faculty research fellow of the National Bureau of Economics Research. He researches industrial organization, public finance, economic regulation, and environmental policy. Muehlegger received his BA from Williams College and PhD from MIT. Prior to teaching at UC Davis, he taught at the Harvard Kennedy School from 2005-2014.