Fuel for inequality: Distributional effects of environmental reforms on private transport

Miguel A. Tovar Reaños and Katrin Sommerfeld

Resource and Energy Economics, 2018, vol. 51, issue C, 28-43

Abstract: This paper provides the first empirical evidence of the distributional effects of subsidies for the purchase of alternative vehicles based on an extended version of Hausman's exact consumer surplus. In consistence with economic theory, we estimate changes in household welfare, inequality, and social welfare resulting from different reforms. First, we find that an additional tax on conventional fuel is regressive. However, returning the additional tax revenue via lump-sum transfers can alleviate this effect. Second, when the additional revenue is also used to finance subsidies for electrical and compressed natural gas (CNG) vehicles, households that own such vehicles experience welfare gains. However, this policy also increases income inequality and decreases social welfare.

Keywords: Q41; R48; C33; Transport policies; Distributional effects; Electrical vehicles; Passenger cars (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0928765516302597
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Fuel for inequality: Distributional effects of environmental reforms on private transport (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:51:y:2018:i:c:p:28-43

DOI: 10.1016/j.reseneeco.2017.10.007

Access Statistics for this article

Resource and Energy Economics is currently edited by J. F. Shogren and S. Smulders

More articles in Resource and Energy Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().