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Carbon tax simulations using a household demand model

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  • Brannlund, Runar
  • Nordstrom, Jonas

Abstract

The main objective of this paper is to analyse consumer response due to changes in energy or environmental policy. To achieve the objective we for-mulate and estimate an econometric model for non-durable consumer demand in Sweden that utilises micro- as well as macro-data. The micro-economic model is conditional on male and female labour supply. A 100 percent increase of the Swedish CO2 tax will, according to the simulations, result in an increased tax payment of SEK 630 or 0.7 percent of disposable income for the households with the lowest disposable incomes. The corre-sponding numbers for the richest households are SEK 990 and 0.3 percent.
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Suggested Citation

  • Brannlund, Runar & Nordstrom, Jonas, 2004. "Carbon tax simulations using a household demand model," European Economic Review, Elsevier, vol. 48(1), pages 211-233, February.
  • Handle: RePEc:eee:eecrev:v:48:y:2004:i:1:p:211-233
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    More about this item

    JEL classification:

    • C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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