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Regulation and redistribution in utilities

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Author Info
Philip Burns
Ian Crawford () (Institute for Fiscal Studies and University of Surrey)
Andrew Dilnot (Institute for Fiscal Studies and University of Oxford)

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Abstract

The consumption of utilities (for example, energy and water), along with that of other goods such as food, clothing, shelter, health and education, is often thought of as something that has particular distributional significance. This concern is reflected by the range of welfare and regulatory measures in place that are designed to guard against non-participation or under-consumption. The pricing of these goods illustrates well the conflicting arguments between economic efficiency and equity. The case for charging VAT on fuel, for example, is essentially an efficiency argument which points to the distortionary effects of a tax system that increases the prices of some goods (for example, double-glazing) and not of others (for example, domestic energy). The counter-argument is based upon notions of equity: that it is unfair to tax a necessity because the effects fall hardest on the living standards of poor households.

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Publisher Info
Article provided by Institute for Fiscal Studies in its journal Fiscal Studies.

Volume (Year): 16 (1995)
Issue (Month): 4 (January)
Pages: 1-22
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Handle: RePEc:ifs:fistud:v:16:y:1995:i:4:p:1-22

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Vanessa Brechling & Stephen Smith, 1994. "Household energy efficiency in the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 44-56, May. [Downloadable!]
  2. Blundell, Richard & Pashardes, Panos & Weber, Guglielmo, 1993. "What Do We Learn About Consumer Demand Patterns from Micro Data?," American Economic Review, American Economic Association, vol. 83(3), pages 570-97, June. [Downloadable!] (restricted)
  3. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September. [Downloadable!] (restricted)
  4. Richard A. Posner, 1971. "Taxation by Regulation," Bell Journal of Economics, The RAND Corporation, vol. 2(1), pages 22-50, Spring. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Andres Gomez-Lobo, 1996. "The welfare consequences of tariff rebalancing in the domestic gas market," Fiscal Studies, Institute for Fiscal Studies, vol. 17(4), pages 49-65, November. [Downloadable!]
  2. Catherine Waddams & Ruth Hancock, 1998. "Distributional effects of liberalising UK residential utility markets," Fiscal Studies, Institute for Fiscal Studies, vol. 19(3), pages 295-319, August. [Downloadable!]
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