Vehicle Ownership Tax and Fleet Renewal in Mexico: Evidence from an Adjusted Structural Index

Abstract

This study proposes a composite index to measure the structural capacity for vehicle fleet renewal in Mexico, incorporating income, private transport spending, and vehicle access. Results show that eliminating vehicle ownership tax is associated with higher renewal potential, while its persistence decouples income from effective modernization, particularly in border regions. The adjusted index identifies fiscal and structural barriers and provides a useful tool for designing differentiated incentives. The evidence supports rethinking vehicle taxes as public policy instruments aimed at sustainability and fleet efficiency.