Heterogeneous Rebound Effects : Comparing Estimates from Discrete-Continuous Models

Drawing on household data collected in Germany between 1997 and 2012, this article investigates the heterogeneity in the direct rebound effect of individual mobility using discrete-continuous models, a common technique for addressing selectivity biases in data sets with endogenously partitioned observational units. After deriving formulae for the marginal effects obtained from these selection correction approaches, we estimate a joint model of automobile ownership and distance driven to quantify the rebound effect, the behaviorally induced increase in driving that results from higher fuel economy. Our findings suggest that between 30% to 80% of the emissions reduction from an efficiency improvement is lost to increased driving. The relatively large magnitude of even the lower bound of this range indicates that estimates of the climate impacts from technological change should take the rebound effect into account