The Effect of Green Taxes on Labor Productivity in the Iranian Economy

Reyhaneh Sedehi () and Homa Esfahanian ()
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Reyhaneh Sedehi: Faculty of Economics, University of Tehran, Tehran, Iran.
Homa Esfahanian: Faculty of Economics, University of Tehran, Tehran, Iran.

Iranian Economic Review (IER), 2019, vol. 23, issue 4, 1041-1055

Abstract: This study attempts to examine the empirical relationship between gasoline taxes (as the most effective energy carrier of emissions) and labor productivities in the case of Iran using the time series data for the period 1990-2015 usingthe autoregressive distributed lag (ARDL) approach. This research tests the interrelationship between the variables using the bounds testing to cointegration procedure. First, we estimated gasoline demand function by ARDL method and thereafter we subordinated the estimated gasoline demand as regressors in the per capita of labor productivity function. According to price variation in the gasoline demand, we calculated the effect of the green tax on labor productivity over three scenarios. The results imply green tax over three scenarios even though Porter Hypothesis has a negative impact on the labor productivity. Estimating the Error Correction model reveals that the speed of adjustment to restore equilibrium is a stable long-run relationship.

Keywords: Green Tax; Industry; Labor Productivity; Gasoline Demand; Iran; ARDL Method. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:eut:journl:v:23:y:2019:i:4:p:1041

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