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Petrol consumption and redistributive effects of its taxation in Spain

Author

Listed:
  • Javier Asensio

    (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

  • Anna Matas

    () (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)

  • José Luis Raymond

    () (Departament d’Economia i Història Econòmica, Universitat Autonoma de Barcelona)

Abstract

The objective of this paper is to estimate a petrol consumption function for Spain and to evaluate the redistributive effects of petrol taxation. We use micro data from the Spanish Household Budget Survey of 1990/91 and model petrol consumption taking into account the effect that income changes may have on car ownership levels, as well as the differences that exist between expenditure and consumption. Our results show the importance that household structure, place of residence and income have on petrol consumption. We are able to compute income elasticities of petrol expenditure, both conditional and unconditional on the level of car ownership. Non-conditional elasticities, while always very close to unit values, are lower for higher income households and for those living in rural areas or small cities. When car ownership levels are taken into account, conditional elasticities are obtained that are around one half the value of the non- conditional ones, being fairly stable across income categories and city sizes. As regards the redistributive effects of petrol taxation, we observe that for the lowest income deciles the share of petrol expenditure increases with income, and thus the tax can be regarded as progressive. However, after a certain income level the tax proves to be regressive.

Suggested Citation

  • Javier Asensio & Anna Matas & José Luis Raymond, 2001. "Petrol consumption and redistributive effects of its taxation in Spain," Working Papers wp0109, Department of Applied Economics at Universitat Autonoma of Barcelona.
  • Handle: RePEc:uab:wprdea:wp0109
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    References listed on IDEAS

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    Cited by:

    1. Albrecht, Johan, 2006. "The use of consumption taxes to re-launch green tax reforms," International Review of Law and Economics, Elsevier, vol. 26(1), pages 88-103, March.
    2. Mohcine Bakhat & Jaume Roselló, 2011. "Tourism Induced Contribution to Diesel Oil and Gasoline Consumption," Working Papers 05-2011, Economics for Energy.

    More about this item

    Keywords

    petrol consumption; redistributive effects; Spain.;

    JEL classification:

    • D19 - Microeconomics - - Household Behavior - - - Other
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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