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Fuel taxes versus car taxes to reduce fuel consumption / Laura Grigolon, McMaster University, Mathias Reynaert, University of Leuven and University of Antwerp &#38; Frank Verboven, Catholic University of Leuven and CEPR, Vox, 10/01/2015http://www.voxeu.org/article/fuel-taxes-versus-car-taxes-reduce-fuel-consumptionUsing a rich dataset for the European car markets, this column shows that consumers moderately undervalue future fuel costs. This investment inefficiency is too small to justify upfront car taxes to promote fuel efficient cars. A car tax results in a more fuel efficient vehicle fleet than a fuel tax, but fails to induce high-mileage consumers to substitute to more fuel efficient cars. Once we take this targeting effect into account, fuel taxes turn out to be more effective...