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A possible role for discriminatory fuel duty in reducing the emissions from road transport: Some UK evidence

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  • David C Broadstock

    ()
    (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China and Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey, UK.)

  • Xun Chen

    (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China)

Abstract

In this paper it is shown that the relative demands for UK Gasoline and Diesel fuels are price responsive. Given differing emissions based externalities from these two fuel types, it is contended that discriminatory fuel duty might be a means to reduce these externalities. Results are derived from an Almost Ideal Demand System with time varying technological progress, estimated using a bootstrap procedure given non-normalities and relative small sample sizes.

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Bibliographic Info

Paper provided by Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey in its series Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) with number 136.

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Length: 18 pages
Date of creation: Feb 2012
Date of revision:
Publication status: Published in Applied Economics Letters, 320(6), 2013, pp. 544–548. (Revised Version)
Handle: RePEc:sur:seedps:136

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Keywords: AIDS model; technology biases; time-varying parameter.;

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  1. Yohe, Gary W., 1979. "Taxing consumption to finance reduced emissions : An alternative pollution control," Economics Letters, Elsevier, vol. 2(1), pages 1-4.
  2. I. A. Moosa & J. L. Baxter, 2002. "Modelling the trend and seasonals within an AIDS model of the demand for alcoholic beverages in the United Kingdom," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 17(2), pages 95-106.
  3. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
  4. Maria De Mello & Alan Pack & M. Thea Sinclair, 2002. "A system of equations model of UK tourism demand in neighbouring countries," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 509-521.
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