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Household Transport Demand in a CGE-framework

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  • Charlotte Berg

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    Abstract

    The main objective of this study is to improve the modelling of household demand for transport services in a Computable General Equilibrium (CGE) model. The new extended model is then used for numerical calculations to test how the Swedish economy reacts to a carbon target. Special attention will be given to distributional effects and the connection between labour supply and work journeys in a sparsely populated country like Sweden. A differentiation between trip purposes and trip length, a complementary relationship between work journeys and labour supply, and a subdivision of households by density of population and income influence the numerical results. Our main conclusions from the analysis of a carbon target are that if the carbon tax revenue is recycled by decreasing the employers’ social contribution fee, welfare costs are lower than with lump-sum replacements of tax revenue to households. The welfare cost may be reduced even further if work journeys are not additionally taxed as compared to the base year. However, the lower total welfare cost is obtained at the expense of making society more unequal, since both labour tax recycling (cuts in employers’ social contributions) and exempting tax on work journeys will make low income groups carry a higher burden. An increased carbon dioxide tax is also shown to increase welfare differences between sparsely populated areas and city regions in Sweden. Copyright Springer Science+Business Media, Inc. 2007

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    Bibliographic Info

    Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

    Volume (Year): 37 (2007)
    Issue (Month): 3 (July)
    Pages: 573-597

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    Handle: RePEc:kap:enreec:v:37:y:2007:i:3:p:573-597

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    Web page: http://www.springerlink.com/link.asp?id=100263

    Related research

    Keywords: computable general equilibrium; consumer demand; distributional effects; energy taxation; transport; C68; D12; Q52;

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    1. De Borger, Bruno & Van Dender, Kurt, 2003. "Transport tax reform, commuting, and endogenous values of time," Journal of Urban Economics, Elsevier, vol. 53(3), pages 510-530, May.
    2. Mayeres, Inge & Proost, Stef, 2001. "Marginal tax reform, externalities and income distribution," Journal of Public Economics, Elsevier, vol. 79(2), pages 343-363, February.
    3. Bovenberg, A.L. & Mooij, R.A. de, 1994. "Environmental levies and distortionary taxation," Open Access publications from Tilburg University urn:nbn:nl:ui:12-152985, Tilburg University.
    4. Parry, Ian W.H. & Bento, Antonio Miguel R., 1999. "Revenue recycling and the welfare effects of road pricing," Policy Research Working Paper Series 2253, The World Bank.
    5. Jorgenson, Dale W. & Wilcoxen, Peter J., 1993. "Reducing US carbon emissions: an econometric general equilibrium assessment," Resource and Energy Economics, Elsevier, vol. 15(1), pages 7-25, March.
    6. Kurt Van Dender, 2003. "Transport Taxes with Multiple Trip Purposes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(2), pages 295-310, 06.
    7. Dahl, Carol & Sterner, Thomas, 1991. "Analysing gasoline demand elasticities: a survey," Energy Economics, Elsevier, vol. 13(3), pages 203-210, July.
    8. Inge Mayeres, 2001. "Equity and transport policy reform," Energy, Transport and Environment Working Papers Series ete0114, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
    9. Harrison, Glenn W & Vinod, H D, 1992. "The Sensitivity Analysis of Applied General Equilibrium Models: Completely Randomized Factorial Sampling Designs," The Review of Economics and Statistics, MIT Press, vol. 74(2), pages 357-62, May.
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    Cited by:
    1. Keirstead, James & Jennings, Mark & Sivakumar, Aruna, 2012. "A review of urban energy system models: Approaches, challenges and opportunities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3847-3866.
    2. Bröcker, Johannes & Korzhenevych, Artem & Schürmann, Carsten, 2010. "Assessing spatial equity and efficiency impacts of transport infrastructure projects," Transportation Research Part B: Methodological, Elsevier, vol. 44(7), pages 795-811, August.
    3. Jonas Westin, 2011. "Labor Market Effects of Road Pricing in a Population with Continuously Distributed Value of Time," ERSA conference papers ersa10p1458, European Regional Science Association.
    4. Samakovlis, Eva, 2008. "How are Green National Accounts Produced in Practice?," Working Paper 105, National Institute of Economic Research.

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