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

Miguel Angel Tovar Reaños and Katrin Sommerfeld
Authors registered in the RePEc Author Service: Miguel Angel Tovar Reanos ()

No 16-090, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

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. Consistently with economic theory, we estimate changes in household welfare, inequality and social welfare corresponding to 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: Transport policies; Distributional effects; Electrical vehicles; Passenger cars (search for similar items in EconPapers)
JEL-codes: C33 Q41 R48 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ene and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Fuel for inequality: Distributional effects of environmental reforms on private transport (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:16090

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