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Effects of the tax on retail sales of some fuels on a regional economy: a computable general equilibrium approach

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  • Francisco Miguel-Vélez

    ()

  • Manuel Cardenete Flores

    ()

  • Jesús Pérez-Mayo

    ()

Abstract

This paper simulates the effects on the economy of Extremadura that are produced by a new tax on retail sales of some fuels. A computable general equilibrium model involving various labour market scenarios is employed as a modelling framework. Model parameters are obtained by calibration, using a social accounting matrix for Extremadura updated to the year 2000. Further, we also include an additional simulation in which a hypothetical regional tax rate, to finance environmental policies, is considered. This second simulation assumes constant fiscal revenues. The results of the first simulation show that the effects of this tax are modest. The simulation shows household welfare losses, decreasing activity levels and generalised price reductions, except in production sectors more directly linked to the oil products sector. In addition, we also observe that this hypothetical additional regional fuel tax rate would reinforce the effects produced by the national tax rate.
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Suggested Citation

  • Francisco Miguel-Vélez & Manuel Cardenete Flores & Jesús Pérez-Mayo, 2009. "Effects of the tax on retail sales of some fuels on a regional economy: a computable general equilibrium approach," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(3), pages 781-806, September.
  • Handle: RePEc:spr:anresc:v:43:y:2009:i:3:p:781-806
    DOI: 10.1007/s00168-008-0228-9
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    References listed on IDEAS

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    1. Xavier Labandeira Villot & Ángel López Nicolás, 2002. "La imposición de los carburantes de automoción en España: Algunas observaciones teóricas y empíricas," Hacienda Pública Española, IEF, vol. 160(1), pages 177-210, march.
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    3. José Manuel Cansino & M. Alejandro Cardenete & Rocío Román Collado, 2004. "Evaluación regional del impuesto monofásico sobre las ventas minoristas de determinados hidrocarburos a través de matrices de contabilidad social," Economic Working Papers at Centro de Estudios Andaluces E2004/21, Centro de Estudios Andaluces.
    4. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, March.
    5. Sherman Robinson & Andrea Cattaneo & Moataz El-Said, 2001. "Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods," Economic Systems Research, Taylor & Francis Journals, vol. 13(1), pages 47-64.
    6. Jose Cansino & M. Alejandro Cardenete & Rocio Roman, 2007. "Regional evaluation of a tax on the retail sales of certain fuels through a social accounting matrix," Applied Economics Letters, Taylor & Francis Journals, vol. 14(12), pages 877-880.
    7. Jan van Heerden & Reyer Gerlagh & James Blignaut & Mark Horridge & Sebastiaan Hess & Ramos Mabugu & Margaret Mabugu, 2006. "Searching for Triple Dividends in South Africa: Fighting CO2 Pollution and Poverty while Promoting Growth," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 113-142.
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    Cited by:

    1. López-Rodríguez, Jesús & Faíña, Andrés, 2014. "Rhomolo and other methodologies to assess The European Cohesion Policy," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 29, pages 5-13.
    2. Ramajo Hernández, Julián & Márquez Paniagua, Miguel Ángel & De Miguel Vélez, Francisco Javier, 2014. "Economic impact of the European Funds in Extremadura during the period 2007-2013," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 29, pages 113-128.
    3. Miguel, Francisco Javier de & Llop Llop, Maria & Manresa, Antonio, 1954-, 2011. "Simulating the Impact of Sectorial Productivity Gains on Two Regional Economies: Key Sectors from a Supply Side Perspective," Working Papers 2072/169681, Universitat Rovira i Virgili, Department of Economics.
    4. Mardones D., Cristián, 2012. "Chile: building a computable general equilibrium model with an application to the Bío Bío region," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    5. Francisco Miguel & Maria Llop & Antonio Manresa, 2014. "Sectoral productivity gains in two regional economies: key sectors from a supply-side perspective," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 731-744, November.

    More about this item

    Keywords

    C68; D58; R13;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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