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Microsimulating the Effects of Household Energy Price Changes in Spain

Author

Listed:
  • Xavier Labandeira

    (rede & Department of Applied Economics. University of Vigo)

  • Jose M. Labeaga

    (Department of Economic Analysis 2. UNED)

  • Miguel Rodriguez

    (rede & Department of Applied Economics. University of Vigo)

Abstract

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.

Suggested Citation

  • Xavier Labandeira & Jose M. Labeaga & Miguel Rodriguez, 2004. "Microsimulating the Effects of Household Energy Price Changes in Spain," Public Economics 0412001, University Library of Munich, Germany, revised 02 Dec 2004.
    • Handle: RePEc:wpa:wuwppe:0412001
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    References listed on IDEAS

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    Cited by:

    1. Xavier Labandeira & José M. Labeaga & Miguel Rodríguez, 2006. "A Residential Energy Demand System for Spain," The Energy Journal, , vol. 27(2), pages 87-112, April.
    2. Labandeira, Xavier & Labeaga, José M. & Rodríguez, Miguel, 2009. "An integrated economic and distributional analysis of energy policies," Energy Policy, Elsevier, vol. 37(12), pages 5776-5786, December.
    3. Mònica Serrano, 2007. "The Production and Consumption Accounting Principles as a Guideline for Designing Environmental Tax Policy," Working Papers 2007.8, Fondazione Eni Enrico Mattei.
    4. José M. Labeaga & Miguel Rodríguez & Xavier Labandeira, 2006. "A Macro and Microeconomic Integrated Approach to Assessing the Effects of Public Policies," Working Papers 2006-02, FEDEA.
    5. Heindl, Peter & Löschel, Andreas, 2015. "Social implications of green growth policies from the perspective of energy sector reform and its impact on households," CAWM Discussion Papers 81, University of Münster, Münster Center for Economic Policy (MEP).
    6. Ivan Faiella, 2011. "The demand for energy of Italian households," Temi di discussione (Economic working papers) 822, Bank of Italy, Economic Research and International Relations Area.

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    More about this item

    Keywords

    Energy; taxation; demand; Spain; CO2;
    All these keywords.

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H - Public Economics

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