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Evaluating a seasonal fuel tax in a mass tourism destination: A case study for the Balearic Islands

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  • Bakhat, Mohcine
  • Rosselló, Jaume

Abstract

This paper estimates the monthly aggregate demand for diesel oil and gasoline in a mass tourism region, characterized for a high level of seasonality. Using time series models, price elasticities are estimated with special emphasis in evaluating differences between seasons in order to assess the consequences of a fuel tax applied exclusively during the high season. Using the case study of the Balearic Islands (Spain) from January-1999 to December-2010 results from a partial adjustment model show a relatively low price-elasticity, evidencing how the internalizing mechanism that could be argued for introducing the tax in order to reduce transport externalities does not work. Additionally no statistical differences have been found between seasons for both fuels invalidating the argument that tourism activity reacts differently to host activity.

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  • Bakhat, Mohcine & Rosselló, Jaume, 2013. "Evaluating a seasonal fuel tax in a mass tourism destination: A case study for the Balearic Islands," Energy Economics, Elsevier, vol. 38(C), pages 12-18.
    • Handle: RePEc:eee:eneeco:v:38:y:2013:i:c:p:12-18
    DOI: 10.1016/j.eneco.2013.02.009
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    Cited by:

    1. Bakhat, Mohcine & Labandeira, Xavier & Labeaga, José M. & López-Otero, Xiral, 2017. "Elasticities of transport fuels at times of economic crisis: An empirical analysis for Spain," Energy Economics, Elsevier, vol. 68(S1), pages 66-80.
    2. Saenz-de-Miera, Oscar & Rosselló, Jaume, 2014. "Modeling tourism impacts on air pollution: The case study of PM10 in Mallorca," Tourism Management, Elsevier, vol. 40(C), pages 273-281.

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    More about this item

    Keywords

    Diesel oil demand; Gasoline demand; Tourism; Fuel tax;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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