Effects of the Tax on Retail Sales of Some Fuels on a regional economy: a computable general equilibrium approach

Francisco Javier De Miguel (), Manuel Alejandro Cardenete and Jesús Pérez-Mayo
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Francisco Javier De Miguel: Department of Applied Economics, Universidad de Extremadura

No 06.05, Working Papers from Universidad Pablo de Olavide, Department of Economics

Abstract: This paper simulates the effects on the economy of Extremadura that are produced by a new tax on retail sales of some fuels. A computable general equilibrium model involving various labour market scenarios is employed as a modelling framework. Model parameters are obtained by calibration, using a social accounting matrix for Extremadura updated to the year 2000. Further, we also include an additional simulation in which a hypothetical regional tax rate, to finance environmental policies, is considered. This second simulation assumes constant fiscal revenues. The results of the first simulation show that the effects of this tax are modest. The simulation shows household welfare losses, decreasing activity levels and generalised price reductions, except in production sectors more directly linked to the oil products sector. In addition, we also observe that this hypothetical additional regional fuel tax rate would reinforce the effects produced by the national tax rate.

Keywords: Tax on retail sales of some fuels; computable general equilibrium models; social accounting matrices; fiscal policy. (search for similar items in EconPapers)
JEL-codes: C68 D58 R13 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2006-03
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-pbe and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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http://www.upo.es/serv/bib/wps/econ0605.pdf First version, 2006 (application/pdf)

Related works:
Journal Article: Effects of the tax on retail sales of some fuels on a regional economy: a computable general equilibrium approach (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pab:wpaper:06.05

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