Energy Cost Pass-Through in U.S. Manufacturing: Estimates and Implications for Carbon Taxes / Sharat Ganapati, Joseph S. Shapiro, Reed Walker.

Format:

Book

Author/Creator:

Ganapati, Sharat.

Contributor:

National Bureau of Economic Research.

Shapiro, Joseph S.

Walker, Reed.

Series:

Working Paper Series (National Bureau of Economic Research) no. w22281.

NBER working paper series no. w22281

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Energy Cost Pass-Through in U.S. Manufacturing

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2016.

Summary:

We study how changes in energy input costs for U.S. manufacturers affect the relative welfare of manufacturing producers and consumers (i.e., incidence). We also develop a methodology to estimate the incidence of input taxes which accounts for incomplete pass-through, imperfect competition, and substitution amongst inputs. For the several industries we study, 70 percent of energy price-driven changes in input costs get passed through to consumers in the short- to medium-run. The share of the welfare cost that consumers bear is 25-75 percent smaller (and the share producers bear is larger) than models featuring complete pass-through and perfect competition would suggest.

Notes:

Print version record

May 2016.