Carbon Tax Simulations Using a Household Demand Model

Runar Brännlund () and Jonas Nordström ()
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Runar Brännlund: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Jonas Nordström: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden

No 508, Umeå Economic Studies from Umeå University, Department of Economics

Abstract: The main objective of this paper is to analyse consumer response due to changes in energy or environmental policy. To achieve the objective we for-mulate and estimate an econometric model for non-durable consumer demand in Sweden that utilises micro- as well as macro-data. The micro-economic model is conditional on male and female labour supply. A 100 percent increase of the Swedish CO2 tax will, according to the simulations, result in an increased tax payment of SEK 630 or 0.7 percent of disposable income for the households with the lowest disposable incomes. The corre-sponding numbers for the richest households are SEK 990 and 0.3 percent.

Keywords: Consumer economics; demand analysis; energy taxation; simulation (search for similar items in EconPapers)
JEL-codes: C30 D12 Q41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-ene, nep-env, nep-pbe and nep-pub
Date: 1999-05-20

Published in European Economic Review, 2004, pages 211-233.

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Persistent link: http://EconPapers.repec.org/RePEc:hhs:umnees:0508

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