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Abstract
Tax systems that favour company cars for personal use could cause households
to have more cars. It could also affect the technology choice. We investigate the
relationship between household car choices and access to a company car through a difference-in-difference design using Norwegian microdata. We find that access to a company car is associated with an increase in the total number of cars and in the number of combustion-engine cars. For electric cars, the results are inconclusive. However, wage growth and access to company cars are also positively correlated. Therefore, we cannot interpret the difference in number of cars between the treatment and control group as a causal effect of the company car scheme, but as correlations. Still, existing evidence on the income elasticity of car demand suggests that the increase in the number of cars is unlikely to be driven by wage growth alone.
Keywords: Fringe benefits; Company car; Car Ownership; Electric Vehicles; Tax
JEL classification codes: D12, H24, J33, Q58, R41