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Estimates from a Consumer Demand System: Implications for the Incidence of Environmental Taxes / Sarah E. West, Roberton C. Williams III.
- Format:
- Book
- Author/Creator:
- West, Sarah E.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w9152.
- NBER working paper series no. w9152
- Language:
- English
- Subjects (All):
- Air quality management.
- Environmental impact charges.
- Carbon taxes.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Estimates from a Consumer Demand System
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2002.
- Cambridge, Mass. : National Bureau of Economic Research, 2002.
- Summary:
- Most studies suggest that environmental taxes are regressive, and thus are unattractive policy options. We consider the distributional effects of a gasoline tax increase using three welfare measures and under three scenarios for gas tax revenue use. To incorporate behavioral responses we use Consumer Expenditure Survey data to estimate a consumer demand system that includes gasoline, other goods, and leisure. We find that the gas tax is regressive, but that returning the revenue through a lump-sum transfer more than offsets this, yielding a net increase in progressivity. We also find that ignoring behavioral changes in distributional calculations overstates both the overall burden of the tax and its regressivity.
- Notes:
- Print version record
- September 2002.
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