Title: Behavioural responses to energy-related taxes: a survey

Authors: A. Ferrer-i-Carbonell, A.C. Muskens, M.J. van Leeuwen

Addresses: Faculty of Economics and Econometrics and SEO, Amsterdam Economics, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands. TNO Inro, Institute for Traffic and Transport, Logistics and Spatial, Development, Postbus 6050, 2600 JA Delft, The Netherlands. SEO, Amsterdam Economics, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, The Netherlands

Abstract: This article examines behavioural responses to changes in energy prices by surveying the magnitude of energy price elasticities. Price elasticity estimates can be used to understand behavioural responses to changes in prices due to environmental taxes. A theoretical framework is presented followed by an overview of the range of price elasticity estimates for energy found in the literature. The empirical estimates are classified on the basis of a selection of characteristics. It is argued that presenting a range of price elasticities provides more information than a unique estimate. The findings suggest that environmental taxes can create a significant reduction in energy use.

Keywords: energy; price elasticity; JEL classification system H3, Q41, Q48; taxes.

DOI: 10.1504/IJGEI.2002.000960

International Journal of Global Energy Issues, 2002 Vol.18 No.2/3/4, pp.202-217

Published online: 18 Aug 2003 *

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