Transport consumption inequalities and redistributive effects of taxes: A comparison of France, Denmark and Cyprus

Akli Berri (), Stéphanie Vincent Lyk-Jensen (), Ismir Mulalic () and Theodoros Zachariadis
Additional contact information
Akli Berri: INRETS, Department of Transport Economics and Sociology (DEST)
Theodoros Zachariadis: University of Cyprus

No 159, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: We evaluate household transport consumption inequalities in France, Denmark and Cyprus, investigate their temporal dynamics and estimate the redistributive effects of taxes on different commodity categories. A comparative analysis is carried out in light of the differences between these countries, most notably in terms of car taxation systems and car ownership levels. A decomposition by expenditure component of the Gini index is applied, using household-level data from repeated cross-sections of expenditure surveys spanning long time periods. The results highlight the effect of car social diffusion. The relative contribution of vehicle use items to total expenditure inequality decreases over time, thus reflecting the more and more widespread use of the car. Moreover, fuel taxes become regressive (i.e. they affect the poor more than the rich), while the progressive character of taxes on the remaining car use commodities weakens with time. Taxes on transport goods and services as a whole are progressive (i.e. they affect the rich more than the poor). However, this is principally due to the progressivity of taxes on automobile purchases. The progressivity of taxes on car purchases is by far much stronger in Denmark. In this country, these taxes are so high that car purchase costs can be afforded only by high incomes. These findings underline the fact that equity issues should not be overlooked when designing policies to attenuate the environmental impact of cars. Increasing car use costs, notably fuel prices, through an increase of uniform taxes would be particularly inequitable.

Keywords: Inequality; transport consumption; household expenditure surveys; Gini index; decomposition by component; redistributive effects of taxes (search for similar items in EconPapers)
JEL-codes: D12 H23 H24 R41 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2010
New Economics Papers: this item is included in nep-ene, nep-env, nep-eur and nep-pbe
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Household transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation for France, Denmark and Cyprus (2014)
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