Distributional and Environmental Effects of Taxes on Transportation
AbstractThis article studies environmental and distributional effects from a differentiated tax system on a set of disaggregated transportation goods. Empirical examination on Norwegian data indicates that higher tax rates on high-pollution luxury modes of transportation such as air flights and taxis reduce inequality and increase the environmental quality. Lower tax rates on low-pollution necessary modes such as buses, bicycles, and mopeds reduce inequality and increase environmental quality. However, higher taxes on high-pollution necessities such as gasoline have favorable environmental effects, but increase inequality somewhat. Railway passenger transportation appears to be distributionally neutral. In order to interpret the estimates with respect to distributional and environmental concerns, we use a theory of distribution effects based on Engel, child, and adult elasticities and a wide range of empirical estimates of environmental hazards from transportation consumption. For different modes of transportation, we study emissions per passenger-kilometer and per monetary unit.
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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 321.
Date of creation: Jul 2002
Date of revision:
Distribution; environmental effects; indirect taxation; Pigou correction; transportation;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Systems - - - Transportation: Demand, Supply, and Congestion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-06-04 (All new papers)
- NEP-GEO-2003-06-04 (Economic Geography)
- NEP-PBE-2003-06-04 (Public Economics)
- NEP-URE-2003-06-04 (Urban & Real Estate Economics)
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.:
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- Erling Røed Larsen, 2002. "Estimating Latent Total Consumption in a Household," Discussion Papers 324, Research Department of Statistics Norway.
- Erling Røed Larsen, 2002. "Searching for Basic Consumption Patterns Is the Engel Elasticity of Housing Unity?," Discussion Papers 323, Research Department of Statistics Norway.
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