Fuel for inequality: Distributional effects of environmental reforms on private transport

Arbeitspapier

This paper provides the first empirical evidence of the distributional effects of subsidies for the purchase of alternative vehicles based on an extended version of Hausman's exact consumer surplus. Consistently with economic theory, we estimate changes in household welfare, inequality and social welfare corresponding to different reforms. First, we find that an additional tax on conventional fuel is regressive. However, returning the additional tax revenue via lump-sum transfers can alleviate this effect. Second, when the additional revenue is also used to finance subsidies for electrical and compressed natural gas (CNG) vehicles, households that own such vehicles experience welfare gains. However, this policy also increases income inequality and decreases social welfare.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEW Discussion Papers ; No. 16-090

Classification and Topics

• Classification: Wirtschaft ; Energy: Demand and Supply; Prices ; Transportation Economics: Government Pricing and Policy ; Multiple or Simultaneous Equation Models: Panel Data Models; Spatio-temporal Models
• Subject: Transport policies ; Distributional effects ; Electrical vehicles ; Passenger cars

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tovar Reaños, Miguel Angel ; Sommerfeld, Katrin
• Event: Veröffentlichung
• (who): Zentrum für Europäische Wirtschaftsforschung (ZEW)
• (where): Mannheim
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/148593
• URN: urn:nbn:de:bsz:180-madoc-418208
• Last update: 10.03.2025, 11:42 AM CET