Welfare Implications of Electric-Bike Subsidies: Evidence from Sweden
We evaluate a large-scale Swedish electric bike (E-bike) subsidy program in 2018, similar to those implemented in many other countries. We combine administrative, insurance and survey data to address challenges of welfare analyses such as non-additionality. We find (1) complete pass through of the average $494 subsidy to consumers, (2) a near doubling of E-bikes sold but one-third of the adopters are nonadditional, and (3) a savings of 1.3 tons of carbon emissions during the life of the E-bike. At a cost of $589 per ton, the program is an expensive way to reduce carbon emissions from driving.
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