Transport consumption inequalities and redistributive effects of taxes: A repeated cross-sectional evaluation on French household data

Akli Berri ()
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Akli Berri: INRETS, Department of Transport Economics and Sociology (DEST)

No 145, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This paper evaluates transport consumption inequalities among French households, investigates their temporal dynamics, and estimates the redistributive effects of taxes on different commodity categories. A decomposition by expenditure component of the Gini inequality index is applied, using household-level data from five expenditure surveys conducted between the end of the 1970’s and the early 2000’s. The results highlight the effect of car social diffusion. Indeed, the relative contribution to global inequality of car use items, especially fuels, decreased regularly over time, 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 over time. Therefore, the design of policy measures to reduce car use and thus attenuate its nuisances for the environment should also account for the imperative of equity. Increasing car use costs, notably fuel prices, through an increase of uniform taxes would be particularly inequitable. In particular, the least wealthy of car-dependent households living in low-densely populated zones would face a heavy burden that they cannot avoid. Area-specific measures may be more appropriate. The case of local public transport underlines the necessity of accounting for disparities in terms of availability of alternatives to the car. Taxes on these services appear to be neutral at national level (i.e. neither progressive nor regressive), but this result hides a diversity of situations in terms of supply of these transport means according to the degree of urbanization and population density. Effectively, these taxes prove to be regressive when focusing on the Greater Paris region, a large urban area very well endowed with public transport infrastructure. Hence, a distinction by degree of urbanization is to be considered.

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)
New Economics Papers: this item is included in nep-ure
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2009-145

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