Energy Taxes as a Signaling Device: An Empirical Analysis of Consumer Preferences
AbstractThis paper presents an econometric study dealing with household demand in Sweden. The main objective is to empirically examine the differences in consumer reaction to the introduction of, or the change, in environmental taxes. Main focus is on environmental taxes as a signaling device. The hypothesis is that the introduction of an environmental tax provides new information about the properties of the directly taxed goods. This in turn may affect consumer preferences for these goods, hence altering the consumption choice. The result from the econometric analysis shows that all goods have negative own-price elasticities, and positive income elasticities. Concerning the signalling effect of environmental taxes the results are somewhat ambiguous. The tax elasticity for energy goods used for heating seems to be significantly higher than the traditional price elasticity, whereas the opposite seems to be the case for energy goods used for transportation.
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Bibliographic InfoPaper provided by Umeå University, Department of Economics in its series Umeå Economic Studies with number 646.
Length: 23 pages
Date of creation: 22 Dec 2004
Date of revision:
Contact details of provider:
Postal: Department of Economics, Umeå University, S-901 87 Umeå, Sweden
Phone: 090 - 786 61 42
Fax: 090 - 77 23 02
Web page: http://www.econ.umu.se/
More information through EDIRC
Household demand; energy tax; tax elasticities; emissions;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
This paper has been announced in the following NEP Reports:
- NEP-ACC-2005-01-05 (Accounting & Auditing)
- NEP-ALL-2005-01-02 (All new papers)
- NEP-ENE-2005-02-15 (Energy Economics)
- NEP-PBE-2005-01-24 (Public Economics)
- NEP-PUB-2005-01-04 (Public Finance)
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