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On the income elasticity and regressivity of emission taxation

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  • Lu, Tingmingke

Abstract

Examining how tax expenditures change with income, I compare the regressivity of fuel taxes and fuel economy-based vehicle purchase taxes. In a model incorporating car usage heterogeneity, the relative regressivity depends on the sign of the income elasticity of driving.

Suggested Citation

  • Lu, Tingmingke, 2023. "On the income elasticity and regressivity of emission taxation," Economics Letters, Elsevier, vol. 223(C).
    • Handle: RePEc:eee:ecolet:v:223:y:2023:i:c:s0165176522004438
    DOI: 10.1016/j.econlet.2022.110969
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    References listed on IDEAS

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    More about this item

    Keywords

    Environmental tax and subsidy; Distributional effects; Demand estimation;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand

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