Household energy prices and inequality: Evidence from German microdata based on the EASI demand system

Reaños, Miguel Angel Tovar; Wölfing, Nikolas

doi:10.1016/j.eneco.2017.12.002

“…This flexibility is advantageous in the light of the close and potentially non-linear relationship between affluence and material footprints found on the country-level (Pothen and Welsch, 2017). Demand systems have been used to study households' energy use and carbon emissions (Baker et al, 1989;Creedy and Sleeman, 2006;Labandeira et al, 2006;Pashardes et al, 2014;Sommer and Kratena, 2017;Tovar Reaños and Wölfing, 2018) but, to our knowledge, this is the first study employing a demand system to investigate material footprints. It is, furthermore, the first to use the EASI demand system to study sustainable consumption.…”

Section: Introductionmentioning

confidence: 99%

The Distribution of Material Footprints in Germany

Pothen

¹

,

Reaños

²

2018

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. The Distribution of Material Footprints in Germany

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“…Unlike previous models of household demand, the EASI allows for a flexible representation of the relationship between household expenditure on a particular commodity and the household's total disposable income. Demand systems have been used to study households' energy use and carbon emissions (Creedy and Sleeman, 2006;Pashardes et al, 2014;Tovar Reaños and Wolfing, 2018), but, to our knowledge, this study which employs the EASI demand system to examine the distributional implications of carbon taxation, taking revenue recycling into account, is unique in the literature. It is also the first study to apply the EASI to Irish data.…”

Section: Demand System Estimationmentioning

confidence: 99%

Carbon taxation in Ireland: distributional effects of revenue recycling policies

Reaños¹,

Lynch²

2019

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We calculate the impact of an increase in carbon taxation on carbon emissions and on income inequality. Carbon emissions reduce by 3.94 per cent for a carbon tax increase of €30 per tonne, and 10.24 per cent for an increase of €80 per tonne. Carbon taxation is found to be regressive, with poorer households spending a greater proportion of their income on the tax than more affluent households. However, returning the carbon tax revenues to households reverses this regressive effect, and the net policy effect is progressive. A 'carbon cheque' that distributes the revenues equally to every household leads to small changes in income inequality, while a targeted mechanism that directs more of the revenues towards less affluent households is more progressive, and actually reduces income inequality. The targeted mechanism resembles recycling the revenues through the tax and welfare system, and thus has lower administrative costs than a 'carbon cheque'. 1 Tovar Reaños and Lynch acknowledge funding from the ESRI's Energy Policy Research Centre. We are grateful to Ankita Gaur and Ciarán MacDomhnaill for assistance with data processing and to ESRI seminar participants and an anonymous reviewer for helpful comments and suggestions. All remaining errors or omissions are our own.

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“…Unlike previous models of household demand, the EASI allows for a flexible representation of the relationship between household expenditure on a particular commodity and the household's total disposable income. Demand systems have been used to study households' energy use and carbon emissions (Creedy and Sleeman, 2006;Pashardes et al, 2014;Tovar Reaños and Wolfing, 2018), but, to our knowledge, this study which employs the EASI demand system to examine the distributional implications of carbon taxation, taking revenue recycling into account, is unique in the literature. It is also the first study to apply 72 | Q u a r t e r l y E c o n o m i c C o m m e n t a r y -S u m m e r 2 0 1 9 the EASI to Irish data.…”

Section: Demand System Estimationmentioning

confidence: 99%