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Microsimulating the Effects of Household Energy Price Changes in Spain

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Author Info
Xavier Labandeira (rede & Department of Applied Economics. University of Vigo)
Jose M. Labeaga (Department of Economic Analysis 2. UNED)
Miguel Rodriguez (rede & Department of Applied Economics. University of Vigo)

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Abstract

In this paper we present a microsimulation model to calculate the effects of hypothetical ex-ante price changes in the Spanish energy domain. The model rests on our prior estimation of a demand system which is especially designed for simultaneous analysis of different energy goods and uses household data from 1973 to 1995. Our objective is to obtain in-depth information on the behavioural responses by different types of households, which will allow us to determine the welfare effects of such price changes, their distribution across society and the environmental consequences within the residential sector. Although the model used is able to reproduce any type of price change, we illustrate the paper with an actual simulation of the effects of energy taxes that resemble a 50 Euro tax on CO2 (carbon dioxide) emissions. The results show a significant response by households, sizeable emission reductions, tax revenues, welfare changes and distributional effects. The simulated policy can thus be considered a feasible option to tackle some of the current and severe inefficiencies in Spanish energy and environmental domains.

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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0412001.

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Length: 30 pages
Date of creation: 02 Dec 2004
Date of revision: 02 Dec 2004
Handle: RePEc:wpa:wuwppe:0412001

Note: Type of Document - pdf; pages: 30
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Web page: http://129.3.20.41

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Related research
Keywords: Energy; taxation; demand; Spain; CO2;

Other versions of this item:

Find related papers by JEL classification:
D6 - Microeconomics - - Welfare Economics
D7 - Microeconomics - - Analysis of Collective Decision-Making
H - Public Economics

This paper has been announced in the following NEP Reports:

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. Labandeira, Xavier & Labeaga, Jose M., 2002. "Estimation and control of Spanish energy-related CO2 emissions: an input-output approach," Energy Policy, Elsevier, vol. 30(7), pages 597-611, June. [Downloadable!] (restricted)
  2. Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June. [Downloadable!] (restricted)
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    Other versions:
  6. Larsen, Bodil Merethe & Nesbakken, Runa, 2004. "Household electricity end-use consumption: results from econometric and engineering models," Energy Economics, Elsevier, vol. 26(2), pages 179-200, March. [Downloadable!] (restricted)
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    Other versions:
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    Other versions:
  16. Vaage, Kjell, 2000. "Heating technology and energy use: a discrete/continuous choice approach to Norwegian household energy demand," Energy Economics, Elsevier, vol. 22(6), pages 649-666, December. [Downloadable!] (restricted)
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Full references

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. Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2005. "A Residential Energy Demand System for Spain," Econometrics 0503005, EconWPA. [Downloadable!]
    Other versions:
  2. Mònica Serrano, 2007. "The Production and Consumption Accounting Principles as a Guideline for Designing Environmental Tax Policy," Working Papers 2007.8, Fondazione Eni Enrico Mattei. [Downloadable!]
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