1. Fuel Tax Incidence in Central America Francisco Alpizar Allen Blackman Rebecca Osakwe EfD Center for Central America Thomas Sterner EEU University of Gothenburg 2 nd Annual Environment for Development meeting Beijing, November 3-7, 2008
8. Fuel tax simulation G = expenditure on fuel P = price fuel Q= quantity fuel ε = price elasticity of demand (1) (3) (4) (2) short run ε = -0.24 (Sterner and Dahl 1992) long run ε = -0.80 (Sterner and Dahl 1992) tax (dP/P) = 10%
9. Change in expenditure on gas+diesel+fuel used in bus transportation as a percent of total expenditure due to a 10% tax, assuming two elasticities for gas+diesel (short-run, long-run) and zero elasticity for fuel used in public transportation, by expenditure decile