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Did the German aviation tax have a lasting effect on passenger numbers?

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  • Helmers, Viola
  • Van der Werf, Edwin

Abstract

The taxation of aviation is a frequently discussed component of governments' efforts to mitigate greenhouse gas emissions. This study examines the impact of the German aviation tax on passenger numbers during the period 2011-2019 using five panel data estimators and a Specification Curve Analysis (SCA) to assess the robustness of the results to changes in the specifications of the econometric model. Employing five base models, we find that the tax induced a 6-11% reduction in the number of passengers departing annually from Germany in the first two years after implementation. For later years, estimated effects are more ambiguous. The SCA, comprising 175 alternative specifications, corroborates our main findings while showing a slightly wider range of effect sizes, especially on the upper bound. The results show that the choice of econometric method can affect research outcomes, especially for the fourth year of the tax and onward.

Suggested Citation

  • Helmers, Viola & Van der Werf, Edwin, 2024. "Did the German aviation tax have a lasting effect on passenger numbers?," Ruhr Economic Papers 1136, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:312424
    DOI: 10.4419/96973318
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    More about this item

    Keywords

    Aviation policy; aviation tax; passenger tax; transport economics; dynamic panel model; specification curve analysis;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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