IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

A choice experiment on fuel taxation and earmarking in Norway

  • Sclen, Håkon
  • Kallbekken, Steffen

Pigouvian taxes are efficient -- but unpopular among voters -- and hence often politically infeasible. Earmarking of revenues has been widely reported to increase public support for taxes, but earmarking is generally not the most efficient use of the revenues. This trade-off between efficiency and political feasibility is the motivation for our primary research objective: to quantify the effect of earmarking on support for fuel tax rises. Our secondary research objective is to investigate why earmarking increases support. Using data from a representative sample of the Norwegian voter population (NÂ =Â 1147), we estimate models of voter preferences for fuel taxes using logistic regression models. Our results show that, in the absence of earmarking, the majority of voters would like to reduce fuel taxes, but earmarking the revenues for environmental measures has a substantial effect on voter support for fuel tax increases, garnering a majority for increases of up to 15% above present levels. Further analysis indicates that a prime reason why earmarking for environmental measures is popular is that it increases the perceived environmental effectiveness of the tax, and hence its legitimacy as an environmental rather than a fiscal policy instrument.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.sciencedirect.com/science/article/pii/S0921800911002710
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 70 (2011)
Issue (Month): 11 (September)
Pages: 2181-2190

as
in new window

Handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2181-2190
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolecon

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.:

as in new window
  1. Ben-Akiva, Moshe & McFadden, Daniel & Train, Kenneth & Börsch-Supan, Axel, 2002. "Hybrid Choice Models: Progress and Challenges," Sonderforschungsbereich 504 Publications 02-29, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
  2. Hanley, Nicholas & Riera, Antoni & Torres, Cati, 2010. "How wrong can you be? Implications of incorrect utility function specification for welfare measurement in choice experiments," Stirling Economics Discussion Papers 2010-12, University of Stirling, Division of Economics.
  3. Margaret Wilkinson, 1994. "Paying for public spending: is there a role for earmarked taxes?," Fiscal Studies, Institute for Fiscal Studies, vol. 15(4), pages 119-35, November.
  4. Danny Campbell & W. George Hutchinson & Riccardo Scarpa, 2007. "Incorporating Discontinuous Preferences into the Analysis of Discrete Choice Experiments," Working Papers in Economics 07/18, University of Waikato, Department of Economics.
  5. Krupnick, Alan & Harrington, Winston & Alberini, Anna, 1998. "Overcoming Public Aversion to Congestion Pricing," Discussion Papers dp-98-27, Resources For the Future.
  6. James M. Buchanan, 1963. "The Economics of Earmarked Taxes," Journal of Political Economy, University of Chicago Press, vol. 71, pages 457.
  7. Carlsson, Fredrik & Frykblom, Peter & Liljenstolpe, Carolina, 2003. "Valuing wetland attributes: an application of choice experiments," Ecological Economics, Elsevier, vol. 47(1), pages 95-103, November.
  8. Louviere, Jordan J & Hensher, David A, 1983. " Using Discrete Choice Models with Experimental Design Data to Forecast Consumer Demand for a Unique Cultural Event," Journal of Consumer Research, University of Chicago Press, vol. 10(3), pages 348-61, December.
  9. Deroubaix, Jose-Frederic & Leveque, Francois, 2006. "The rise and fall of French Ecological Tax Reform: social acceptability versus political feasibility in the energy tax implementation process," Energy Policy, Elsevier, vol. 34(8), pages 940-949, May.
  10. Dresner, Simon & Jackson, Tim & Gilbert, Nigel, 2006. "History and social responses to environmental tax reform in the United Kingdom," Energy Policy, Elsevier, vol. 34(8), pages 930-939, May.
  11. Philippe Thalmann, 2004. "The Public Acceptance of Green Taxes: 2 Million Voters Express Their Opinion," Public Choice, Springer, vol. 119(1_2), pages 179-217, 04.
  12. Kallbekken, Steffen & Aasen, Marianne, 2010. "The demand for earmarking: Results from a focus group study," Ecological Economics, Elsevier, vol. 69(11), pages 2183-2190, September.
  13. Arne Risa Hole, 2006. "A comparison of approaches to estimating confidence intervals for willingness to pay measures," Working Papers 008cherp, Centre for Health Economics, University of York.
  14. S. Jaensirisak & M. Wardman & A. D. May, 2005. "Explaining Variations in Public Acceptability of Road Pricing Schemes," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 39(2), pages 127-154, May.
  15. Nick Hanley & Robert Wright & Vic Adamowicz, 1998. "Using Choice Experiments to Value the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 413-428, April.
  16. McFadden, Daniel, 1974. "The measurement of urban travel demand," Journal of Public Economics, Elsevier, vol. 3(4), pages 303-328, November.
  17. Birol, Ekin & Karousakis, Katia & Koundouri, Phoebe, 2006. "Using a choice experiment to account for preference heterogeneity in wetland attributes: The case of Cheimaditida wetland in Greece," Ecological Economics, Elsevier, vol. 60(1), pages 145-156, November.
  18. Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, March.
  19. William Greene & David Hensher, 2010. "Does scale heterogeneity across individuals matter? An empirical assessment of alternative logit models," Transportation, Springer, vol. 37(3), pages 413-428, May.
  20. Harris, Katherine M. & Keane, Michael P., 1998. "A model of health plan choice:: Inferring preferences and perceptions from a combination of revealed preference and attitudinal data," Journal of Econometrics, Elsevier, vol. 89(1-2), pages 131-157, November.
  21. Carlsson, Fredrik & Martinsson, Peter, 2001. "Do Hypothetical and Actual Marginal Willingness to Pay Differ in Choice Experiments?: Application to the Valuation of the Environment," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 179-192, March.
  22. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
  23. Eliasson, Jonas & Mattsson, Lars-Göran, 2006. "Equity effects of congestion pricing: Quantitative methodology and a case study for Stockholm," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(7), pages 602-620, August.
  24. Linda Court Salisbury & Fred M. Feinberg, 2010. "Alleviating the Constant Stochastic Variance Assumption in Decision Research: Theory, Measurement, and Experimental Test," Marketing Science, INFORMS, vol. 29(1), pages 1-17, 01-02.
  25. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132.
  26. Rivlin, Alice M, 1989. "The Continuing Search for a Popular Tax," American Economic Review, American Economic Association, vol. 79(2), pages 113-17, May.
  27. Krinsky, Itzhak & Robb, A Leslie, 1986. "On Approximating the Statistical Properties of Elasticities," The Review of Economics and Statistics, MIT Press, vol. 68(4), pages 715-19, November.
  28. Hsu, Shi-Ling & Walters, Joshua & Purgas, Anthony, 2008. "Pollution tax heuristics: An empirical study of willingness to pay higher gasoline taxes," Energy Policy, Elsevier, vol. 36(9), pages 3612-3619, September.
  29. Ison, S., 2000. "Local authority and academic attitudes to urban road pricing: a UK perspective," Transport Policy, Elsevier, vol. 7(4), pages 269-277, October.
  30. Dresner, Simon & Dunne, Louise & Clinch, Peter & Beuermann, Christiane, 2006. "Social and political responses to ecological tax reform in Europe: an introduction to the special issue," Energy Policy, Elsevier, vol. 34(8), pages 895-904, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:eee:ecolec:v:70:y:2011:i:11:p:2181-2190. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.