Household heterogeneity, aggregation, and the distributional impacts of environmental taxes

• 成果类型: Article
• 署名作者: Rausch, Sebastian; Schwarz, Giacomo A.
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2016.04.004
• 发表日期: 2016
• 页码: 43-57
• 关键词: Environmental tax incidence; heterogeneous households; general equilibrium; Aggregation bias; Distributional impacts

摘要

This paper examines how the general equilibrium incidence of an environmental tax depends on the effect of different incomes and preferences of heterogeneous households on aggregate outcomes. We develop a Harberger-type model with general forms of preferences and substitution between capital, labor, and pollution in production that captures the impact of household heterogeneity and interactions with production characteristics on the general equilibrium. We theoretically show that failing to incorporate household heterogeneity can qualitatively affect incidence. We quantitatively illustrate that this aggregation bias can be important for assessing the incidence of a carbon tax, mainly by affecting the returns to factors of production. Our findings are robust to a number of extensions including alternative revenue recycling schemes, pre-existing taxes, non-separable utility in pollution, labor leisure choice, and multiple commodities. (C) 2016 Elsevier B.V. All rights reserved.