Distributional effects of environmental meat taxes in Sweden- Can the poor still eat meat?

Sarah Säll ()
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Sarah Säll: Department of Economics, Swedish University of Agricultural Sciences, Postal: Department of Economics, Box 7013, Swedish University of Agricultural Sciences, SE-750 07 Uppsala, Sweden, http://www.slu.se/ekonomi

No 2015:3, Working Paper Series from Swedish University of Agricultural Sciences, Department Economics

Abstract: This paper looks at the distributional effect of an environmental tax on meat in Sweden, if such a tax was to be introduced. Welfare effects are measured as Compensation Variation (CV) for multiple price changes where Hicksian cross price elasticities, household expenditures and price changes are used in the calculations. Results show that taxes on meat are neutral over households when expenditures on meat are used as welfare indicators, and regressive if income is used. This can be explained as households use similar shares of total expenditures on meat. The households with the smallest income levels need to be compensated with 950 SEK per person and year to feel that utility is not lowered if taxes on meat are introduced, and the households with the highest income levels need to be compensated with 1176 SEK per person and year. This corresponds to 0.78% and 0.80% of total expenditures for the groups respectively. Compared to income levels this is 1.04% for the households with the smallest income levels and 0.52% for the households with the largest income.

Keywords: Meat taxes; Distributional effects; Compensating Variation; Sweden (search for similar items in EconPapers)
JEL-codes: D12 D60 Q18 Q50 Q58 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2015-02-12
New Economics Papers: this item is included in nep-agr, nep-env and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:slueko:2015_003

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