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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
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[object Object],Policy context (source: Baldasano et al. 2003) ,[object Object]
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Costa Rica: data ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Average household expenditure on fuel as a percentage of total expenditure, by fuel type and decile
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%
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
Replicating analysis for Nicaragua and Panama using World Bank LSMS data ,[object Object],[object Object],[object Object]
Costa Rica fuel price elasticity ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Looking ahead ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
THANK YOU

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Blackman Et Al Presentation Incidence Fuel Taxes

  • 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
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  • 7. Average household expenditure on fuel as a percentage of total expenditure, by fuel type and decile
  • 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
  • 10.
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Editor's Notes

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