Microsimulating the Effects of Household Energy Price Changes in Spain
In this paper we present a microsimulation model to calculate the effects of hypothetical ex-ante price changes in the Spanish energy domain. The model rests on our prior estimation of a demand system which is especially designed for simultaneous analysis of different energy goods and uses household data from 1973 to 1995. Our objective is to obtain in-depth information on the behavioural responses by different types of households, which will allow us to determine the welfare effects of such price changes, their distribution across society and the environmental consequences within the residential sector. Although the model used is able to reproduce any type of price change, we illustrate the paper with an actual simulation of the effects of energy taxes that resemble a 50 Euro tax on CO2 (carbon dioxide) emissions. The results show a significant response by households, sizeable emission reductions, tax revenues, welfare changes and distributional effects. The simulated policy can thus be considered a feasible option to tackle some of the current and severe inefficiencies in Spanish energy and environmental domains.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Espey, Molly, 1998. "Gasoline demand revisited: an international meta-analysis of elasticities," Energy Economics, Elsevier, vol. 20(3), pages 273-295, June.
- David Pearce, 2003. "The Social Cost of Carbon and its Policy Implications," Oxford Review of Economic Policy, Oxford University Press, vol. 19(3), pages 362-384.
- Zhang, ZhongXiang & Baranzini, Andrea, 2004.
"What do we know about carbon taxes? An inquiry into their impacts on competitiveness and distribution of income,"
Elsevier, vol. 32(4), pages 507-518, March.
- Zhang, ZhongXiang & Baranzini, Andrea, 2000. "What do we know about carbon taxes? an inquiry into their impacts on competitiveness and distribution of income," MPRA Paper 13225, University Library of Munich, Germany, revised Jan 2003.
- Speck, Stefan, 1999. "Energy and carbon taxes and their distributional implications," Energy Policy, Elsevier, vol. 27(11), pages 659-667, October.
- Puller, Steven L. & Greening, Lorna A., 1999. "Household adjustment to gasoline price change: an analysis using 9 years of US survey data," Energy Economics, Elsevier, vol. 21(1), pages 37-52, February.
- Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2006. "A Residential Energy Demand System for Spain," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 87-112.
- Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, "undated". "A Residential Energy Demand System for Spain," Working Papers 2005-04, FEDEA.
- Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2005. "A Residential Energy Demand System for Spain," Econometrics 0503005, EconWPA.
- Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2005. "A Residential Energy Demand System for Spain," Working Papers 0501, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- Baker, Paul & Blundell, Richard & Micklewright, John, 1989. "Modelling Household Energy Expenditures Using Micro-data," Economic Journal, Royal Economic Society, vol. 99(397), pages 720-738, September.
- Vaage, Kjell, 2000. "Heating technology and energy use: a discrete/continuous choice approach to Norwegian household energy demand," Energy Economics, Elsevier, vol. 22(6), pages 649-666, December.
- Vaage, K., 2000. "heating Technology and Energy Use: a Discrete/Continuous Choice Approach to Norwegian Household Energy Demand," Norway; Department of Economics, University of Bergen 214, Department of Economics, University of Bergen.
- Hausman, J. A. & Newey, W. K. & Powell, J. L., 1995. "Nonlinear errors in variables Estimation of some Engel curves," Journal of Econometrics, Elsevier, vol. 65(1), pages 205-233, January.
- J. A. Hausman & W. K. Newey & J. L. Powel, 1988. "Nonlinear Errors in Variables: Estimation of Some Engel Curves," Working papers 504, Massachusetts Institute of Technology (MIT), Department of Economics.
- King, Mervyn A., 1983. "Welfare analysis of tax reforms using household data," Journal of Public Economics, Elsevier, vol. 21(2), pages 183-214, July.
- Antonia Cornwell & John Creedy, 1996. "Carbon taxation, prices and inequality in Australia," Fiscal Studies, Institute for Fiscal Studies, vol. 17(3), pages 21-38, August.
- Cornwell, A. & Creedy, J., 1995. "CArbon Taxation, Prices and Inequality in Australia," Department of Economics - Working Papers Series 481, The University of Melbourne.
- Terry Barker & Jonathan Köhler, 1998. "Equity and ecotax reform in the EU: achieving a 10 per cent reduction in CO2 emissions using excise duties," Fiscal Studies, Institute for Fiscal Studies, vol. 19(4), pages 375-402, November.
- Keen, Michael, 1986. "Zero Expenditures and the Estimation of Engel Curves," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 1(3), pages 277-286, July.
- Xavier Labandeira & José M. Labeaga, 1999. "Combining input-output analysis and micro-simulation to assess the effects of carbon taxation on Spanish households," Fiscal Studies, Institute for Fiscal Studies, vol. 20(3), pages 305-320, September.
- Labandeira, Xavier & Labeaga, Jose M., 2002. "Estimation and control of Spanish energy-related CO2 emissions: an input-output approach," Energy Policy, Elsevier, vol. 30(7), pages 597-611, June.
- Nicol, C. J., 2003. "Elasticities of demand for gasoline in Canada and the United States," Energy Economics, Elsevier, vol. 25(2), pages 201-214, March.
- Holtedahl, Pernille & Joutz, Frederick L., 2004. "Residential electricity demand in Taiwan," Energy Economics, Elsevier, vol. 26(2), pages 201-224, March.
- James Banks & Richard Blundell & Arthur Lewbel, 1997. "Quadratic Engel Curves And Consumer Demand," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 527-539, November.
- Nesbakken, Runa, 1999. "Price sensitivity of residential energy consumption in Norway," Energy Economics, Elsevier, vol. 21(6), pages 493-515, December.
- Elizabeth Symons & John Proops & Philip Gay, 1994. "Carbon taxes, consumer demand and carbon dioxide emissions: a simulation analysis for the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 19-43, May.
- Larsen, Bodil Merethe & Nesbakken, Runa, 2004. "Household electricity end-use consumption: results from econometric and engineering models," Energy Economics, Elsevier, vol. 26(2), pages 179-200, March.
- Dahl, Carol & Sterner, Thomas, 1991. "Analysing gasoline demand elasticities: a survey," Energy Economics, Elsevier, vol. 13(3), pages 203-210, July.
- Kayser, Hilke A., 2000. "Gasoline demand and car choice: estimating gasoline demand using household information," Energy Economics, Elsevier, vol. 22(3), pages 331-348, June.
- Hondroyiannis, George, 2004. "Estimating residential demand for electricity in Greece," Energy Economics, Elsevier, vol. 26(3), pages 319-334, May.
- Paul Ekins & Stefan Speck, 1999. "Competitiveness and Exemptions From Environmental Taxes in Europe," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(4), pages 369-396, June.
- Tiezzi, Silvia, 2005. "The welfare effects and the distributive impact of carbon taxation on Italian households," Energy Policy, Elsevier, vol. 33(12), pages 1597-1612, August.
- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June. Full references (including those not matched with items on IDEAS)